Naomi Klouda

The Marijuana Control Board postponed action until April on whether to legalize onsite consumption facilities after running out of time in its two-day meeting in Anchorage Nov. 14-15.
In the meantime, because the board made it through only 22 of the 50 marijuana operations applications, they agreed to meet back in Anchorage Nov. 28-29 to finish the work. Otherwise, applicants would be left hanging until the Jan. 21 meeting of the board in Juneau.
In the closing minutes of the meeting at the Dena’ina Civic and Convention Center, board member Loren Jones made a motion to postpone the onsite consumption vote. This third attempt to pass a measure, brought forth by industry representative Brandon Emmett, that would allow businesses patterned on bars to open for the public to allow people to socialize and legally consume marijuana products.
But Jones put the brakes on, recommending that a new subcommittee be appointed to take up regulations deciding how the public facilities would function.
“I don’t want to do this on the fly,” Jones said. “We received 550 pages of public comment that I haven’t even been able to read yet. There are fiscal implications with enforcement staff.”
Board member Mark Springer of Bethel, representing rural residents, agreed that it would be better to concentrate on what’s involved in passing the new regulations when there is more time to go through the finer details.
“This is the most consequential issue we’ve taken up,” Springer said. “This is pretty big stuff. We just saw what people think about a cultivation operation in a residential neighborhood. Image what we’ll start hearing when we start taking testimony on onsite consumption.”
Springer was referring to an industrial-zoned neighborhood off Badger Road in Fairbanks where seven people testified against AK Green Bee, Inc. opening a marijuana grow operation. The residents complained it would be bad for the children in the neighborhood, that it would cause air pollution and bring new traffic on a small road that is critical to a number of users, including a church.
Green Bee operators won approval for their operation in a 3-2 vote, with Springer and Chairman Peter Mlynarik voting against it.
Emmett argued that the board has heard from the public regarding onsite consumption, and a year has passed with three attempts.
“We’ve debated this for a couple of years. It’s been out for public comment, and motions have been approved,” Emmett protested. “We should no longer waste public resources on this issue. If this is something that’s not in the public interest then let’s vote on it. If the board’s not interested in approving it, then we need to vote it down. We need to settle it.”
The matter first came up in January as a proposal by Emmett, an industry representative who owns a Fairbanks marijuana operation. It was tabled in February when Chair Peter Mlynarik, Loren Jones and Mark Springer voted to give the matter more time to see how the federal government would react under a new administration to legalization of marijuana, which is still federally classified as a schedule one illegal substance.
It was also taken off the agenda due to a technical error in the public notification process.
Emmett brought onsite consumption back into spotlight in March, but debating the proposal, which would make Alaska the first in the nation to allow it, didn’t receive a full hearing by the board until July, when an alternative was selected from three proposals.
In Fairbanks on July 14, a measure passed 3-2 to go out for 60 days of public comment. The board at the time agreed they wanted to give municipalities time to weigh in on the matter with the extended comment period. The Nov. 14-15 meeting was to include a vote on whether to amend the regulation and send it back out for public comment, or vote it up or down.
“I’m not sure what new information we will gather by putting it out there for more comments,” Nick Miller, an industry representative from Anchorage, told fellow board members at the meeting. “If you want more information, let’s gather it before January. We need to move on as an industry, correct the issues raised in the director’s report, not take in new information.”
Director Erika McConnell brought up the need for more staff in the enforcement section of the Alcohol and Marijuana Control Office, if the measure should pass. She also cautioned the board to spell out how violations would be handled.
In a new motion before the board, they voted 3-2 to postpone the matter until April, with Mlyarnik, Jones and Springer voting in favor and Miller and Emmett against it. They did not take up Jones’ motion, which calls for a separate committee to address specific questions, after Assistant Attorney General Harriet Milk told the board that any subcommittee would carry with it public notification responsibilities.
The board then also agreed to meet Nov. 28-29 in Anchorage to complete the applications. Mlyarnik, in explaining why the onsite consumption agenda item must wait, said he felt a special obligation to answer the waiting applicants.
“They’ve invested money in their businesses and they want an answer,” he said. “This is a money issue for them and we shouldn’t hold them up.”
Springer assured the people attending the meeting, about 50 to 75 who filtered in and out during the two days, that the matter isn’t over.
“We heard you and we will get to onsite consumption. We just won’t be doing it today,” he said.
Naomi Klouda can be reached at [email protected]

A certain “flying cow” will be remembered long after it’s left Puerto Rico.
In this case, it’s AT&T’s drone invention, a cell on wings also known as a COW. At work in Puerto Rico, AT&T crews from Alaska and Washington reconnected residents of several devastated areas with cell service, using a new technology for the first time.
LTE-connected drones hold a lot of potential for FirstNet-subscribers, AT&T’s Kathryn Spencer said, referring to the telecom’s contract to develop, build and operate the nationwide broadband network for first responders.
Exploring the capabilities of this technology in the wake of Hurricane Maria’s devastation will help restore connectivity and assess how first responders can use the drone in the future, she said.
The mini-helicopter, 7.5 feet in diameter, provides voice, data and text service.
Led by Art Pregler, the AT&T drone program director, the COW was critical in restoring wireless connectivity to customers in a 40 square mile-area outside San Juan, Puerto Rico, after the hurricane devastation left major portions of the island disconnected. The COW hoovers above the ground connected to controllers by a tether and can extend coverage farther than other temporary cell sites, Pregler said.
“It’s working as planned in an equipment configuration for over 4,000 people,” Pregler said Nov. 8. “We had tested it in the past but not in a real world disaster scenario. So far, it’s adhering to the modeling.”
The team is in Carolina, east of Puerto Rico’s capital city San Juan. When finished there, the company planned to relocate it to various other areas such as the military hospital at Manati Coliseum. When Hurricane Maria hit Puerto Rico Sept. 20, massive destruction complicated the ability to get cell towers back in function. It’s now into the second month for many to regain phone use, Pregler said.
“Looking at the area around here, it’s very much impacted,” Pregler said. “Power poles, pretty much any standing structures, are down. Windows are missing. Roofs are missing or pealed back. We can see the aftermath and it is significant.”
In San Juan, a city of 400,000 people, the power is mostly back, both electrical and cell power, he said.
“The Flying COW is now at edge of where it’s been fixed. If we turn it off, there’s no connectively at all,” he said.
The COW works to temporarily provide cell service. Limited by FAA requirements, it extends 200 feet to 400 feet in the air. From that vantage point, it can extend coverage farther than other temporary cell sites, he said. This makes it ideal for providing coverage in remote areas.
“In the meantime our network people are rebuilding the network. Once online, we can take down the flying COW and there will be no effect to the user experience. It stitches from temporary to permanent,” Pregler said.
AT&T normally uses a terrestrial unit for patching cell service. These are on vehicles that can do the same work as the Flying Cow, but extend up from the back of a truck.
“They work in an area that’s about 60 vertical feet then not beyond that,” Pregler said. “This way, we have a wider coverage area. We can establish connection for a wider area than the prior solution.”
One of the team is Alaskan Steve Poirot, an operations and safety director at Aerial Data Management for WorleyParsons. He assists in piloting the drone and developed a written procedure for operating it on a tether.
“My involvement in drones goes back to 2006, and I’ve been working in that field continuously since 2013, when we began preparing for BP’s drone operations on Alaska’s North Slope,” Poirot said. “These were the first commercial drone flights over land in the U.S., following Conoco’s earlier commercial flight over the Arctic Ocean.”
Though the AT&T-designed drone brought relatively unknown technology to interim cell restoration, it’s been working well. Better than that, Poirot, knowing the remoteness of Alaska’s wilderness where no ready power source or cell towers are nearby, anticipates a number of future uses by AT&T, he said.
Because emergency work could involve any natural or man-made disaster where crews can’t lean on a commercial power source, the COW’s can tap into a spectrum of sources, including generators, microwave, Ethernet power, even fiber connection.
“There are broad applications for the drone in all kinds of circumstances,” Pregler said. “We’re just really pleased to see it work well.”
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Naomi Klouda can be reached at [email protected]

Alaska Communications Systems Group Inc. reported modest 0.4 percent gains as revenues increased in third quarter to $56.7 million with growth attributed to advancements in fixed wireless technology and losses attributed to a shortage in Universal Services Funds for the Rural Health Care Program.
In a year-over-year comparison to 2016, Alaska Communications saw overall revenue rise from $56.5 million to $56.7 million. Of that, business and wholesale provided 61.5 percent of the total revenue, up to $31.3 million from $29.4 million, or a gain of 6.4 percent.
Consumer revenue provided 16.4 percent of the total revenue, a category that saw a modest loss of 0.7 percent when revenues dipped to $9.3 million from $9.4 million. Broadband revenues rose from $23.1 million to $25 million – the largest category of gains at 8.3 percent. President and CEO Anand Vadapalli said broadband growth comes from both new customers and existing customers buying more products.
Regulatory revenue from the Federal Communications Commission, or FCC, was down to $12.5 million from last year’s third quarter of $13.1 million.
Losses in Universal Services Fund subsidies for Rural Health Care, meant to make remote delivery equal to urban costs, continued to bring down the bottom line, said Senior Vice President of Finance Laurie Butcher.
The FCC capped annual funding at $400 million for the third 2016 window, and cancelled any remaining payments claimed because the money had been used up. This left Alaska’s telecoms holding the bills in order to ensure rural health care rates were kept low, both GCI and Alaska Communications officials have said.
“Our results reflect uncertainty in the FCC’s Rural Health Care Program, causing a negative impact on revenue of $0.7 million for both the quarter and year-to-date and on adjusted EBITDA of $1.5 million for the quarter and $2.6 million to date,” Butcher said.
(EBITDA, a key metric for Alaska’s telecoms, stands for earnings before interest, taxes, depreciation and amortization.)
Vadapalli elaborated that the RHC funds impact both adjusted EBITDA and revenue.
“The program is critical for our rural health care providers to continue to provide services in our communities,” he said. “We are big advocates for both increasing the funding for this program as well modernizing the rules to make them more relevant for today’s technologies.”
Bright spots for Alaska Communications are emerging from a new fixed wireless technology strategy, Vadapalli said.
“Unlike mobile wireless where we are using our cell phones, fixed wireless is using a wireless connection to a fixed location like a residential or business location,” he said. “Fixed wireless is being used as an access technology in lieu of copper or fiber. With the advancements in this technology, we are able to deliver high speeds, at affordable rates, and in a capital efficient manner.”
Overall, the sales performance in business and wholesale was consistent with expectations and reflected “a robust delivery funnel,” Vadapalli said.
“This reflects services we have sold and contracted with customers and are now pending delivery and revenue recognition,” Vadapalli said. “The delivery of sold services can sometimes be long lead times, particularly for larger customers or complex services, depending on the customer timelines, construction timelines, etc.”
Alaska Communications continues to plan out its agreement with OneWeb’s satellite broadband internet technology set to go online in 2019. Alaska Communications will be delivering faster broadband after the two companies signed a non-exclusive memorandum of understanding.
The low-latency, ultra high-throughput satellite technology by OneWeb will allow lag-free web browsing after the Florida-based OneWeb launches its polar orbit to cover Alaska along with the rest of the U.S, Vadapalli said. The plan calls for 10 satellites to be launched in early 2018, pending testing.
Naomi Klouda can be reached at [email protected]

Amazon is opening a “big door” to Alaska’s small business entrepreneurs, inviting them to sell their goods and services via the shopping giant’s network.
“It’s a worldwide door at Amazon,” an official with the organization told a packed crowd at a Nov. 8 workshop put on by the Small Business Administration Alaska District Office.
While there’s talk or hopes that the e-commerce giant might open an Alaska branch — and according to Amazon spokesman Erik Fairleigh, that’s not out of the question — the big topic of the day was how to use Amazon’s network.
The workshop featured Kyle Walker, the head of new business strategy for Amazon Exclusives from the Seattle headquarters who gave plenty of advice for entrepreneurs hoping to crack the code of a global market.
The panel discussion offered advice on e-commerce from Jon Bittner, the director of the Small Business Development Center; Cat Mason, a SCORE mentor; Zoi Maroudas, founder of Bambinos Baby Food of Anchorage; and Chris Fischer, co-owner of Alaska Beach Stone Lamp of Homer.
Because so many consumers go online to shop, the SBA and Amazon are working together to provide small businesses with tools, tips and information they need to be successful selling goods and services online.
Alaska was the first district office in the country to offer a joint-training opportunity with Amazon, said SBA Alaska Director Nancy Porzio.
With its isolated geography, Alaska is a challenging place to woo new customers, Porzio noted. The opportunity to partner with Amazon came after SBA Administrator Linda McMahon’s visit to Alaska in July. Her next stop after leaving Anchorage’s SBA tour was Seattle and Amazon. When she left Alaska, McMahon suggested a team-up between Alaskans and Amazon.
More than half the products sold on Amazon come from small businesses and entrepreneurs in small towns and cities across the U.S. and the world, Walker told the audience.
Walker said Amazon is excited to connect with entrepreneurs in Anchorage to help them grow their businesses.
“There are thousands of small businesses throughout Alaska listing their products for sale on Amazon and reaching customers in their neighborhood and around the world,” Walker said later when asked how many Alaskans currently do business on Amazon. “These are independent small businesses that are controlling their pricing and the items they want to sell on Amazon.”
One of those is Homer artisan Fischer. He told of his experience selling on Amazon, a newer development for the lamp maker who used to go it alone on a website he and his dad developed.
Bambinos Baby Foods CEO Maroudas also is gearing up to sell on Amazon.
A surefire way to sell is realizing people love to hear stories about Alaska products.
In Fischer’s case, he and his dad find objects — rocks, driftwood, glass — on the beaches of Kachemak Bay and build lamps. No two are alike with wood veneer lamp shades, Greywacke earth rocks stacked in various configuration, solid brass fittings.
“One day I was drilling into a piece of drift wood, and the wood really stank. It was this awful odor,” Fischer told the workshop group. “I put that on my Facebook page and got more responses to that than anything, just sharing an experience.”
The point was to keep sharing stories and keep up on social media to expand customer base.
Maroudas’ story is of the pristine soil Alaska vegetables grow in that’s never been saturated with pesticides or chemicals, she told the workshop attendees.
Combined with her medical background, she devised pure organic baby foods to distribute nationally and globally. Hers is the first national baby food subscription company that ships directly to parents anywhere in the U.S.
Since they are shipping-dependent, both entrepreneurs urged prospective business people to calculate postage costs ahead of time. They also need to keep plenty of stock on hand to allow for missed or late shipping arrivals. Fischer uses a triple-walled box to hold the heavy stone lamps. But a $2 box became $5 each, when he calculated the cost of getting his boxes shipped to him in Homer.
“Know your upfront costs. Know everything about the market, the products and any kink in the chain,” Maroudas added. “If there’s a kink, deal with it immediately.”
Bittner, the SBDC executive director, cautioned against getting “too successful, too fast.”
“That’s a real thing,” he said.
If a thousand orders come in and can’t be filled, a person’s reputation sours and customers “will remember that a long time after.”
Jumping on Amazon’s train gives manifold advantages, Walker told the group.
“Use our team to help you navigate. You don’t have to invest in a huge team. Use the order fulfillment customer service at Amazon. Take advantage of our shipping,” he said. “Imagine visiting 100,000 stores to reach the same number of people you can reach on Amazon.”
Amazon has no product-listing fee for small businesses, Walker said.
“It’s easy for small businesses to sell on Amazon and only takes a matter of minutes to sign up and get started. Amazon welcomes all businesses to list their items on our online marketplace and pick the model that’s ideal for their business,” he said.
E-Commerce isn’t much different from traditional, said Cat Mason, the SCORE mentor who coaches entrepreneurs in marketing, branding and business development.
“You still have to build relationships. You are a brand and your reputation makes a difference. Partnering with Amazon means partnering with a good reputation,” he said.
That said, he also advised people to network face-to-face as often as possible.
Bittner said 40 percent of all businesses sell through social media.
“Show pictures. Use customer reviews. Don’t rely on just Facebook and Twitter. Use more comprehensive marketing channels,” he said.
Walker said hearing Fischer’s and Maroudas’ stories makes him more likely to buy the lamp and the baby food.
“I like to hear the stories,” he said. “Now I’m more likely to buy because we do connect with something in the story. It’s not that different online.”
You’re catching customer attention as they scroll, though, as opposed to face-to-face.
Those at the workshop raised a lot of questions.
Daisy Nicolas, owner of Drool Central, an Alaska homemade natural canine treat and meal baker, said she’s been successful at farmers’ markets. But she’s intimidated at the thought of selling on Amazon. What’s the first step?
Walker said entrepreneurs might start by offering one product to sell on Amazon. Grow bigger as you grow more comfortable with how it all works, he said.
Another wanted to know if products could be offered by state on Amazon.
“Alaskans get lost fairly easily,” he said.
Walker said that’s an idea he can take back to Amazon.
Amazon also sells services by zip code, Walker said in response to a question from a digital tech company.
“We have a self-service model, so businesses can visit www.amazon.com/sell to get started,” he said.
Naomi Klouda can be reached at [email protected]

The 10th annual Startup Weekend Nov. 10-12 brought out seven teams and about 45 participants spending 58 hours on a weekend researching and vetting new business ideas with total strangers at the Boardroom in Downtown Anchorage
The Boardroom, a co-working space that’s become known as a hive of entrepreneurial activity in the state, hosted the slate of emerging business ideas that by Sunday night ranged from cultural awareness gifting for corporations to new tech apps to financial startups.
Startup Weekend offers a “safe place to fail,” said organizer Ky Holland, founder of four startups and a business consultant. The weekend is a chance for would-be entrepreneurs to find out if their business idea is valid. They’ll learn new skills from mentors and find potential co-founders.
Unlike the annual Alaska Business Plan Competition, the ideas don’t need to be market-tested, but they do need to meet the criteria from a rather intimidating lineup of judges: Mead Treadwell, former lieutenant governor and president of Pt Capital; Bob Kaufman, founder and CEO of Alaska Channel, digital media expert and management consultant; Sioux-z Humphrey Marshall, the innovation team manager at the Municipality of Anchorage and the first winner of the Alaska Business Plan Competition in 2000; Katherine Jernstrom, founder of The Boardroom and fund manager at Alyeska Venture Management; and Thom Holder, vice president of business development and operations with CIRI.
FutrSelf (First place): Ben Matheson, a former public radio news reporter and web development specialist with Alaska Landscape Conservation Cooperatives, and his team envisioned an online platform integrated with on-boarding processes at small businesses. The group realized they wanted to answer the need for Americans’ short- and medium-term savings through a venture called FutrSelf.
“One statistic that really hit home for us is that 47 percent of Americans would need to borrow or sell something to come up with $400 in a pinch,” Matheson said. “This, combined with other money stressors can be a cost not just for the individual but for their workplace. We see small businesses suffering from increased turnover and absenteeism, and a market that isn’t pursued as aggressively as larger companies.”
The same day that they fill out their tax forms and direct deposit information, FutrSelf would auto-enroll employees in a simple savings program that will automatically deduct a small portion of the employee’s paycheck and route it to an online bank or brokerage.
FutrSelf wouldn’t be in the long-term retirement business to start off but would want the employee to have a solid emergency fund and access to it for when life throws a curveball. Investing can come after the foundation is built, he said.
Matheson was joined by Mike Casti, a business development expert with Alaska Industrial Development and Export Authority; Emily Niebuhr, a business consultant, and Kavita Jattansingh, a National Weather Service forecaster/researcher.
HostMore (Second place, tie): Lorena Knapp, Jaron Saturnino and Erin Baca came up with a plan to package real estate services for down payments for a second home.
HostMore would package the home-buying process much as Airbnb packages its renting room platform services. They’ve identified a formula or “sweet spot” for how many nights a room would need to be rented out for profitability and risk. The startup would offer other supports to help them be successful, said Baca, an operations manager for Ascent, a program management firm that works with large capital projects.
Knapp, a TEDx motivational speaker and medic helicopter pilot, was a lead presenter. Saturnino is a freelance graphics designer.
FitMood (Third place, tie): Led by Tasha Webster, an MBA student at Alaska Pacific University whose background is in mental health and social work, Dana Herndon, Ben Kellie and Ciara Zervantian came up with a mood tracker that is recorded on an Apple iwatch.
The problem FitMood wants to solve is that one out of five people in the U.S. are believed to suffer from some kind of mental health disorder like anxiety, depression or other conditions. Yet, only 36 percent will receive help for it.
This startup would provide data input on the person wearing the tracker by recording lumens (sunny, rainy, cold, cloudy), heart rate, barometric pressure, noise and other data. It could then provide information on how those factors impact mood to help people become more self-aware, Webster said.
This group won second place, tying with HostMore.
Dawn Patrol (Third place, People’s Choice): Jeff Levine, a programmer/developer at Levinology Labs, and his team came up with an app that would provide better, broader information for backcountry adventurers.
“This gets knowledge into their own hands from data that is available, LIDAR mapping, snow density around ski facilities and other information through a unique software,” Levine said.
It also could save lives. Currently, there’s no technology that exists that gives high quality snow pack information, Levine said. The startup conducted a survey and found that experienced backcountry users want better data and they’re willing to pay for it.
“They’ve spent thousands of dollars in equipment and don’t believe there’s enough quality information,” Levine said.
Dawn Patrol would offer an app that displays LIDAR readings on the snow pack density and how the snow has moved recently.
Levine, Ryan Witten, Ian Lang, Lee and Lucas Brown, Kayla Nowak, won third place and People’s Choice.
Wayfarer Travel: Samona Norombaba, Reed Lane and Lisa Nkonge came up with a tech platform to connect locals offering unique experiences to tourists and locals.
Small tour operators offering a more intimate outdoor experience, such as individuals who want to offer a fat tire biking trip on Portage Glacier, would receive reviews from previous users, much like Airbnb, and allows tourists to connect to a variety of niche experiences.
Culture Story: 2017 Miss Alaska Alyssa London, a Tlingit and 2012 Stanford University graduate, teamed up with Elana Habib, Kelsey Schober and Allison Baker at Startup Weekend. Though London said she knew from her professional work as a motivational speaker and consultant that corporate gift giving could use new conceptualizing, she hadn’t know specifics until attending Startup, when the team came up with a viable plan for selling the concept to corporations.
The $90 million annual corporate gift-giving market could be better served if each gift were tailor-made for that business. The visual London used as an example was a Native gift box designed with a Tlingit motif.
Ak Retro Sales: Alicia Halla and Jason Scheunemann, both members of the 176th Wing at Joint Base Elmendorf-Richardson, teamed up with Gem Thomas and Emily Sekona to satisfy a yearning 30-something-year-olds may feel about the original days of video gaming.
Their startup would sell a game controller Retro Entertainment System to families and gamers. It would make vintage games such as Atari and Pac Man available in an easy format, the controller.
As the winning team, FutrSelf is gearing up for the regional competition, a virtual pitch that is due by the end of the week. This is the beginning of Global Entrepreneurship Week, with 200 startup weekends around the world.
“We have a lot more research and validating to do before the more concrete steps,” Matheson said. “We’re talking with local small businesses all week and taking a bit of a deep dive into this world.”
Naomi Klouda can be reached at naomi,[email protected]

So far this year, Alcohol and Marijuana Control Office investigations show more notices of violations were handed out to bars than to marijuana operations by a count of 57 to 44.
Tax revenue from marijuana operations this year through October is $1.5 million, while alcohol tax generated $2.2 million. Budgets for each segment for AMCO in 2017 came to $1.6 million for alcohol and $1.2 million for marijuana.
The numbers came from a budget report by Alcohol and Marijuana Control Office Director Erika McConnell to the Marijuana Control Board Nov. 14 when it met in Anchorage for the second time this year, at the Dena’ina Civic and Convention Center.
“Marijuana revenue is moving up in a close race,” observed board member Mark Springer of Bethel, who represents rural Alaska on the board.
Of all marijuana tax revenues collected at $50 per ounce, calculated since the first operators opened for business in 2016 until Sept. 30, the state has collected $3.7 million. In employment, figures show that 1,924 people were issued handlers’ permits, the certification required of all staff and sales people employed in marijuana operations throughout the state.
Some 18 marijuana operators were given notification of violations, a larger number by twice previous amounts, Enforcement Officer James Hoelscher acknowledged to the board. The violations ranged from continued missteps in advertising to tracking system errors. Businesses must account for all inventory in given time periods or receive a violation.
A larger investigation that took months and involved the Anchorage Police Department revealed three illegal operations that had made up their own business names and tried to pass as legal operations in Anchorage.
According to APD, three people in three different businesses were charged. Each faces multiple counts of fourth-degree misconduct involving a controlled substance and two unclassified felonies for continuing a criminal enterprise, said Renee Oistad, APD spokesperson. Oistad said she couldn’t give the names of the illegal operators because the cases haven’t gone to court yet.
A discussion followed by the board and Hoelscher about what could be done to bring penalties against people who break the state’s marijuana laws. Department of Law Attorney Harriet Milk said the board has the authority to levy fines for certain infractions outside of state court action.
Board Chair Peter Mlynarik agreed that, once Hoelscher forwards violations, the board will look at possible fines in the future.
One problem brought to light by marijuana industry attorney Jana Weltzin is the current lack of a system for revoking marijuana handler permits after employers catch them stealing marijuana products.
“It’s come to my attention from clients that they can’t revoke a bad employee’s permit after they steal from them,” Weltzin said. “I’m hoping you will address this sooner rather than later.”
Another matter brought to light by public testimony is the need for a more precise way of testing THC in marijuana products. Brian Coyle, owner of AK Green Labs LLC, said testing needs to be “more uniform and accurate.”
Director McConnell, in her report, said she wanted to create a scoping committee to take up questions and issues related to testing. The board unanimously agreed to establish the committee, and board member Brandon Emmett, an industry representative from Fairbanks, volunteered to be on it. McConnell will appoint additional members.
“Through our work on the edibles testing regulation and some of the testing issues that have been raised by licensees recently, I believe a thorough examination of the testing regulations is warranted,” McConnell had advised the board in her director’s report.
She wants to look at evidence of significant deviation in potency testing results of the same product by different labs, she told the board.
She also wants to see if products such as edibles have a 50-milligram THC limit or a 60-milligram THC limit.
Currently, regulations require one item from a production lot to be tested, such as cookies. But another section of the regulation requires testing for “homogeneity of each serving in a multi-unit package.”
McConnell posed the question about whether testing one item is enough when a production may include 2,000 cookies or pieces. And, if the product is infused with marijuana by injection, does each serving in a multi-unit package need to be tested?
These are some of the questions the committee will be taking up.
As the board meeting continues in Anchorage at the Dena’ina Center Nov. 15, it will review what remains of the 50 applications for operators and an agenda that includes considered whether to legalize onsite consumption.
Also on the agenda is a regulation considering random sampling of products, streamlining edibles testing and restricting who can have a financial interest in a business to those who are licensed to operate it.
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Naomi Klouda can be reached at [email protected]

General Communications Inc. posted a net loss of $9 million in third quarter as subscriber declines continue in cable TV, data and wireless customers.
With business revenue nearly flat, the $5 million decline in consumer revenue year-over-year was roughly equal to the overall decline from $236.6 million to $231.2 million in total revenue in the third quarter.
The Alaska telecom giant also continued to see changing consumer habits as an impact on the bottom line as well as impacts from the state recession that has caused thousands of lost jobs and outmigration of residents.
GCI lost 3,500 cable modem subscribers from the third quarter of 2016 to the third quarter of 2017, and 9,000 basic cable subscribers in the same time.
Consumer wireless lines declined by 2,100 year-over-year while business wireless lines were down by 600 lines.
GCI was notified Nov. 8 of Federal Communications Commission approval for its application to merge with Colorado-based Liberty Interactive. In doing so, the FCC disagreed with petitions filed by Alaska Communication Systems Group Inc. and Quintillion Networks that argued the merger had potential for harm to consumers.
“We carefully and thoroughly reviewed the record, including material submitted by the applicants pursuit to the Bureaus’ requests,” the FCC wrote in its Memorandum Opinion and Order. “We conclude there is no potential harms associated with the transaction and that it serves the public interest, convenience and necessity.”
GCI and Liberty announced an agreement this past April that would allow the new company, GCI Liberty, to purchase GCI operating companies for $1.12 billion. GCI shareholders will own 23 percent of the equity and 16 percent of the voting interest in GCI Liberty.
A second group consists of former shareholders of the Liberty Ventures Group of Liberty Interactive, which will own about 77 percent of the equity interests and 84 percent of the voting interest in GCI Liberty.
Liberty Interactive is a publicly-traded corporation that owns interests in subsidiaries and companies primarily engaged in video content and online commerce industries. Companies include Evite, LendingTree, FTD, giggle, a resort chain and Liberty Broadband, which is made up of the assets of Charter Communication and its subsidiary Skyhook.
“Our competitive analysis, which forms an important part of the public interest evaluation, is informed by, but not limited to, traditional antitrust principles,” the FCC order stated. “The DOJ (Department of Justice) has independent authority to examine the competitive impacts of proposed mergers and transactions involving transfers of Commission licenses, but the Commission’s competitive analysis under the public interest standard is somewhat broader.”
In its section on “Potential Public Interest Harms and Benefits,” the FCC stated, “We find no evidence in the record to support a finding that the transaction will result in potential public interest harm… We also reject the Petitioners requests that we condition the transaction, because we find the Petitioners’ claims of harm to be speculative and their proposed conditions to be unrelated to the transaction.”
The petitioners Alaska Communications and Quintillion had contended that the petition should be denied or have conditions because of GCI’s existing practice of charging “non-competitive” pricing that makes it hard for small rural telecoms to charge lower rates.
They cited an example of the Nome School District paying $305,000 per month for its 800 students’ broadband. When Quintillion bid on the project, the cost was $95,000 a month. Quintillion recently completed the Alaska portion of its subsea Arctic network with service set to begin in December.
GCI spokeswoman Heather Handyside told the Journal in August that not all bid contracts for services offer an “apples-to-apples” comparison, and believed there were differences in the delivery of services that accounted for the cost deferential in Nome.
The FCC memo acknowledged the four complaints from GCI’s competitors: “that GCI controls the only broadband-capable middle-mile facilities in many locations in rural Alaska; that GCI has failed to provide other service providers wholesale access to these facilities on reasonable and non-discriminatory rates, terms and conditions; and that GCI receives the majority of end user/taxpayer money for support in Alaska, but charges monopoly rates to wholesale and retail customers, including schools, libraries, and rural health care providers; and post-consummation, GCI will have a greater incentive and ability to exercise market power to deprive wholesale customers as well as retail customers of affordable access to GCI network facilities and services.”
But the FCC said it has made clear that although GCI and Alaska Communications are free to use such support as Universal Service Fund disbursements to defray the cost of middle mile transports necessary to deliver broadband, “they are not required to do so.”
GCI also will be required to submit terrestrial middle mile network maps and annual updates to new middle mile facilities, so the FCC sees no reason to require that in an additional order.
“In particular, as we stated above, the Commission found in the Alaska Plan Order that carriers that choose to build middle mile transport would not be regulated under dominant carrier regulation, but noted that GCI had acknowledged that its provision of middle mile service, including the TERRA network, is a Title II service subject to common carriage requirements …We find that this already addresses the Petitioners’ argument that GCI Liberty must offer transport services on reasonable and non-discriminatory terms,” the order stated.
The FCC also sided with GCI in its assertion that the advantages of the merger —the increased size of GCI Liberty — will provide GCI with improved access to more diverse revenue sources and capital markets that could allow it to adjust to economic conditions in Alaska.
“We find that this is likely to provide some benefit to consumers,” the FCC order stated.
GCI reported in its third quarter that in response to a shareholder vote, the company is responding to additional shareholder requests for information on the transaction.
“We are now expecting to close the transaction in the first quarter of 2018 rather than the fourth quarter of 2017, subject to the satisfaction of customary closing conditions, including the regulatory and shareholder approvals,” GCI wrote in its third quarter 2017 financial results.
Handyside said that the company is on track, but needs to complete other requirements prior to finalizing the transaction.
Third quarter results
Consumer revenues of $110 million in the third quarter were up by $4 million or 3.5 percent, from the second quarter but were still down by $5 million compared to the third quarter of 2016.
Losses accrued when wireless revenues declined by $5 million year-over-year largely from fewer purchases of new cellphones by consumers, according to GCI.
Yet another impact, according to Handyside, is the completion of a rate plan simplification project that went into effect Sept. 30.
“GCI has provided customers with a variety of special offers over the years. Managing the number of offers in our system became unrealistic so we streamlined the plans we offer,” Handyside said. “Instead of changing to a new GCI plan, some customers may choose to shop for a different carrier. This has resulted in a bit more churn (customer turnover) than we usually see and is attributable to our one-time effort to streamline plan options.”
By the end of 2017, GCI will deliver broadband service to 10 additional communities in the Norton Sound and Kotzebue region, bringing the total number of communities served on the TERRA network to 84.
“By expanding the TERRA footprint in the Norton Sound region, even more customers will have access to GCI products and services,” Handyside said.
Growth should be coming with new offerings from GCI and the expanded customer base.
“For example, customers have responded positively to our new Simply Share wireless plans for rural markets since we launched them earlier this year,” she said.
Second quarter business revenue was affected by a $5 million reduction from the Universal Services Rural Health Care, or RHC, adjustment.
The RHC support mechanism helps rural health care providers to pay rates for telecommunications services similar to urban counterparts. But GCI took a cut of $5 million when funding, designated through the FCC, ran out.
Operating income was down $2.2 million in the quarter from $26.3 million to $24.1 million, and is down by $15.4 million year-to-date versus 2016.
Year-to-date total revenue is down by nearly $18 million from $701.5 million through three quarters of 2016 to $683.6 million in the first nine months of 2017.
Naomi Klouda can be reached at [email protected]

Proponents of legalizing public establishments for marijuana consumption are hoping the third time is a charm.
Onsite consumption leads the action agenda for the Nov. 14-15 Alaska Marijuana Control Board meeting in Anchorage at the Dena’ina Civic and Convention Center.
The matter first came up in January as a proposal put forth by board member Brandon Emmett, an industry representative who owns a Fairbanks marijuana business. It was tabled in February when Chair Peter Mlynarik, Loren Jones and Mark Springer voted to give the matter more time to see how the federal government would react under a new administration to legalization of marijuana, which is still federally classified as a schedule one illegal substance.
It was also taken off the agenda due to a technical error in the public notification process.
Emmett brought onsite consumption back into the limelight in March, but debating the proposal, which would make Alaska the first in the nation to allow it, didn’t receive a full hearing by the board until July, when an alternative was selected from three proposals.
In Fairbanks on July 14, a measure passed 3-2 to go out for 60 days of public comment. The board at the time agreed they wanted to give municipalities time to weigh in on the matter with the extended comment period.
It’s not yet known which communities weighed in, because the board hasn’t yet posted its public comments. But industry members have made their preference known.
“We have really leaned our shoulder into this,” said Cary Carrigan, the executive director of the Alaska Marijuana Industry Alliance. “We believe it’s critically important for the industry and vitally for the public as well, especially for tourists who need a legal venue for public consumption.”
Proponents argued after the 2014 passage of the vote making recreational marijuana legal that regulations should be patterned after those for alcohol, which includes public consumption in bars, said Emmett.
Proposed onsite consumption of marijuana would, in theory, be similarly based on laws governing public drinking establishments: kick out the inebriates, vigilance on illegal sales, monitor for over-consumption and keep out anyone under 21.
The problem with that comparison nowadays is that most bars don’t allow smoking because of local ordinances, public health officials such as board member Jones pointed out during board meetings.
Groups such as the American Lung Association, local government officials and individuals have argued air filters and other innovations haven’t solved the key question of public smoke hazards, said Jones, a Juneau assemblyman appointed to the public health seat for his long history in the substance abuse and mental health fields.
If the measure passes, the regulation would go back out for 30-day public comment, unless the board decides to grant a longer period for comments.
As written and passed by the board for the public comment in July, the regulations for legal onsite establishments would be the following:
• The facility would need to protect employees from second-hand smoke by offering a window viewing area to monitor the floor where consumption takes place.
• Onsite consumption would need to be screened off from public viewing just as current regulations keep shop windows blocked from outsiders looking in.
• Local governments would have the right to prohibit such facilities from allowing smoking if they chose.
• Marijuana business operation applicants would need to submit written plans to the Marijuana Control Board for addressing security, separation from the retail area and employee protections from second-hand smoke.
• Smoking marijuana concentrates, known as “dabs,” would not be allowed.
• Entertainment such as television, music or games would be allowed.
“I’ve talked to other state directors,” said AMIA’s Carrigan. “They are laser-focused on this one issue to see what we’re going to do.”
In November 2016, Denver, Colo. voters passed Initiative 300, allowing businesses to apply for a license to allow adult consumption in designated areas of art galleries, yoga studios, coffee shops and a variety of other businesses. But that’s a pilot program inside city limits that will sunset in 2020 unless it’s extended by the city council or voter initiative, Carrigan noted.
In California, medical bars are established that allow people to be monitored while they take prescription doses of cannabis for various illnesses and conditions.
But before being allowed to enter, the patron must carry a prescription card, explained Jesse Henry, the executive director of the Barbary Coast, located in the Mission district of San Francisco for the past 10 years. The businesses are tightly regulated to not allow for general adult usage.
“Now that recreational marijuana has passed, we’ll see if there can be expansions,” Henry said, referring to the November 2016 vote.
“Bud” tenders monitor the area where medical marijuana products are consumed. He described people who come in daily for their seizure dosages and cancer therapy, among other patients’ illnesses.
“If you don’t have a medical card and prescription, you can’t get in,” Henry said.
He also described an air filtration system he said gets 99 percent of the smoke out.
The Anchorage Assembly took proactive action at its Oct. 10 meeting by passing an ordinance that, while it doesn’t advocate for the public marijuana sites, sets perimeters in case the board’s regulation passes.
Assemblyman Christopher Constant, who represents Downtown, said he wants to see a legal way for tourists to consume marijuana products. He also sees it as a personal liberty issue.
“I don’t know what is going to happen on the Marijuana Control Board, but I do see that they have a chair who is anti the regulation,” Constant said, referring to Chair Mlynarik, the Soldotna police chief who also helped sponsor an initiative that went to Kenai Peninsula Borough residents that would have banned legal marijuana operations outside of cities. The measure lost 64-36 percent.
“It may be hard to get the votes, but I think the challenges in the smoking issues can be worked out locally,” Constant said.
The ordinance passed by the assembly states that the smoke-free areas for employees must be included. They also want outside smoking areas available, separated by a wall and a secure door from the indoor business portion. The business must maintain a ventilation system so that it “does not emit an odor that is detectible by the public from outside the pubic consumption site except as allowed by a local government conditional use permit process.”
The MOA will charge $2,000 for the initial business license to a consumption site, and thereafter a $1,000 renewal fee.
To see the full agenda of the Nov. 14-15 Marijuana Control Board, go to https://www.commerce.alaska.gov/web/Portals/9/pub/MCB/Minutes/2017/11.14/NovemberMCBMeetingAgenda.pdf
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Naomi Klouda can be reached at [email protected]

Kaitlyn Payne didn’t anticipate having a career as an ExxonMobil environmental engineer.
She never pictured an engineer’s job could entail detecting polar bears by radar or counting caribou population herds in Alaska via their “spectral signature.” That’s a new technology that avoids using more intrusive helicopter and airplane census.
Based on the size of the pixels, Payne tracks caribou populations counting calves versus adults.
“I didn’t have any engineers in my family. I wasn’t aware of what you do as an engineer,” Payne said in her introduction at a panel discussion for “Introduce a Girl to Engineering Day” Nov. 1 at the Change Point Building in Anchorage.
Paine “rejigged” her major from agricultural studies to environmental issues after an internship for Rep. Michael McNulty, D-NY, in the late 1990s.
“As an intern, I had learned about environmental issues and challenges facing companies. I thought I could probably help with that,” she said.
Targeting an interest in engineering fields at a younger age such as junior high could have focused Payne’s studies a lot earlier and saved her a change in college major. That’s the idea behind Introduce a Girl to Engineering Day, a time when professionals mentor and inspire 120 middle grade students through hands on science-engineering projects.
ExxonMobil Corp., the Anchorage School District and the Girl Scouts of Alaska organized the event meant to interest more women into future engineering fields. The girls came from the Mat-Su Borough, Eagle River and Anchorage.
They might already have a science preference, or a teacher or scout leader recommended them to attend, Payne said.
Currently, only 14 percent of all engineers in America are females, according to the American Society of Mechanical Engineers, or ASME.
That’s up from 5.8 percent in the early 1980s and better boding for days ahead because 18 percent to 20 percent of engineering students are now women, the ASME estimates.
Reasons for the low ratio include lack of female engineering role models, misconceptions of what it’s like to be an engineer and lacking opportunities to problem-solve like real world engineers do, according to the ASME.
“The numbers are not there professionally,” said Sue Perles, the executive director of Girl Scouts of Alaska. “Engineering courses at colleges and universities are male-dominated. But this is an option. I believe if you let girls hear that message while they are young enough, they will not be the least bit bothered by the historical dominance by the field.”
The Girl Scouts have long held a STEM (science, technology, engineering and mathematics) emphasis, Perles said.
“This event fits so well with scouts’ emphasis on STEM and career exploration, teaching them to be brave and do things they might not otherwise do,” she said.
Payne said, “We wanted to give girls key, hands-on experiences and exposure to people from the University of Alaska Engineering school, volunteers from different organizations, to show all the various things you can – which I’m not sure is emphasized in school.”
Role models came in the form of college students and professionals — both female and male — in telecom, mechanical, chemical and environmental engineering fields.
“They saw male engineers at the events as well who are supportive and want them to succeed,” said Sonia Laughland, an ExxonMobil chemical engineer.
They also gave lots of advice.
An engineering degree can be completed in four years. Some may chose to specialize further through a master’s or Ph.D. program, but the basic degree prepares one for job-readiness upon graduation.
You don’t have to be good at all science and math areas such as geometry and calculus, for example.
“If you aren’t good in every subject, it’s OK,” said Sonia Laughland.
In her own case, born in Russia, raised in Canada and Arizona, English wasn’t her first language. Switching to the American math system gave her the first C she’d ever earned.
But at the University of Arizona in Tuscan, she found herself part of a team of engineering students who studied and worked together to tackle physics and chemistry problems.
“You’re in it together,” Laughland told her mentoring group. “You’ll make friends and study group partners. They will help you and you’ll help them.”
Engineering doesn’t follow the stereotype of isolated lab work in real life, either.
At ExxonMobil, Laughland is an environmental and regulatory advisor at work on permitting for the production facility at Point Thomson on the North Slope.
She accepted the position five years ago after internships in mining and at Proctor and Gamble.
Payne and Laughland form an environmental team with others at ExxonMobil analyzing a number of technical factors, though Laughland’s area is air emissions, water use compliance and waste management on site.
“My mentor had worked at Exxon 35 years when she retired. It was fascinating to hear how she got to where she was; I can’t imagine the struggles. She had a strong personality and you can see why,” Laughland said.
Katie Johnson, another presenter at the event, was a Susitna Girl Scout for 11 years, from Brownies to senior year at Stellar High School in Anchorage. She is a mechanical engineer for Coffman Engineers.
The troop sold Girl Scout cookies as competitively as any other, but they were also on a leading end of the STEM push.
“We were a science-heavy troop. I think we earned just about every single science-related badge that could be had,” Johnson said. “Some of it was the function of the leader, Kathy Adkins, who was willing to let us pursue our dreams. We called our 606 Troop Bob.”
After graduating from Stellar High School in 1998, Johnson earned a mathematics degree from Purdue University and an engineering degree from the University of Alaska Fairbanks.
As a frequent mentor for high school students and scouts, she tells them teamwork and problem-solving skills are as relevant to engineering as science and math.
“I tell students every mistake you make is just part of the fabric of your life. It’s part of your story. Learn as much from your mistakes as your successes,” Johnson said.
At Coffman Engineers, she works on oil and gas design for Alaska production clients, conducting stress analysis, code compliance and maintenance plans.
“It’s constantly different and each project is a little different. It’s rewarding to see designs and plans,” Johnson said.
The mood of the day’s mentoring sessions can’t help but get infectious as students delved into balloons as building blocks and ventured into the chemistry of lava lamps.
“It’s hard to be bored if you’re an engineer,” Laughland tells them. “You get the best of both worlds, to be creative and to be technical.”
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Naomi Klouda can be reached at [email protected]

The annual report detailing national and regional economic impacts of U.S. fisheries totaled $9.6 billion in value in 2016 with Alaska as usual producing more than the rest of the nation combined.
Alaska produced 58 percent of all landings and for the 20th straight year brought in the highest volume, according to the 2016 Fisheries of the United States report by the National Marine Fisheries Service.
The top spot for all ports in the nation went to Dutch Harbor, which brought in 770 million pounds with Alaska pollock accounting for 89 percent of that volume. Dutch Harbor also produced the second-highest value in the nation at $198 million, behind New Bedford, Mass, which reeled in 77 percent of its overall catch in sea scallops to account for its No. 1 spot in the nation at $327 million in value.
The Aleutians, where Trident Seafoods operates the largest processing plant in the nation on Akutan, was the second-ranked port by landings in the nation with 508 million pounds for $105 million. Kodiak was ranked No. 4 in landings with 417 million pounds and a value of $109 million.
The report on landings of Alaska pollock, 3.4 billion pounds, increased from 2015 numbers. That fishery brought in 336.2 million pounds more than the previous five-year average.
By volume, the nation’s largest commercial fishery remains Alaska pollock, which showed near record landings of 3.4 billion pounds. That represents 35 percent of the total U.S. commercial and recreational seafood landings.
Alaska led all states in volume with landings of 5.6 billion pounds. The lineup shows Alaska was followed by Louisiana, 1.2 billion pounds; Washington, 551.9 million pounds; Virginia, 363.3 million pounds; and Mississippi, 304 million pounds.
Alaska led all states in value of landings with $1.6 billion followed by: Maine, $633.6 million; Massachusetts, $552.2 million; Louisiana, $407.2 million; and Washington, $321.0 million.
Under the review of major species, the count of Pacific cod landings was 708.6 million pounds, an increase just more than 1 percent from 699.1 million in 2015 to 708.6 million in 2016. Rockfish landings were down by 12 percent between the two years at the catch of 42.3 million pounds and valued at nearly $16.8 million, down by nearly 13 percent from 2015.
Halibut landings in the Atlantic and the Pacific were 25.2 million pounds valued at $127 million, an increase of 3 percent or 627,000 pounds over 2015.
The Pacific halibut accounted for all but 285,000 pounds of the 2016 total halibut catch. It brought in 6 percent higher value at $5.05 per pound, compared with $4.86 in 2015.
Alaska brought in 97 percent of all U.S. commercial salmon landings, but the catch volume was down by more than 47 percent, a decrease of 505 million pounds compared with 2015.
By salmon species, there was a decrease of nearly 2.8 million pounds of sockeye; chinook salmon decreased by 6.2 million pounds; and pink landings were down by 79 percent at 477.2 million pounds less than 2015. But coho landings had increased by 20 percent or 5 million pounds. Average prices per pound increased to 70 cents in 2016, almost 30 cents higher than 2015 prices.
The 2016 pink salmon numbers widely missed the forecast and Gov. Bill Walker sought and received an economic disaster declaration from the U.S. Department of Commerce, but so far Congress has not appropriated any funds for it.
Julie Speegle, the public information officer for National Marine Fisheries Service Alaska Region in Juneau said Alaska had a 7.5 percent decline in salmon landings overall by volume from a record 2015 harvest.
“Much of this decline is accounted for by the expected large decline in the cyclical pink salmon harvest in 2016,” she said.
Other highlights from the report show Alaska landings were almost 542.6 million pounds valued at almost $380.5 million. This was a decrease of 498.2 million pounds, or 48 percent, and almost $32.7 million less, or nearly 8 percent, in value compared with 2015.
Salmon catches and prices rebounded in 2017, with a catch of 213 million fish, beating the state forecast by 9 million. The state sockeye catch was more than 50 million fish for the 10th time in state history and Alaska saw one of the best chum salmon harvests ever at 22 million fish.
Under stocks of interest, the Pacific herring harvest of 52.3 million pounds was valued at $5.5 million but that fishery saw a decline of 24 percent overall in 2016. Alaska accounts for 99 percent of the Pacific coast herring catch and saw a decrease of 16.6 million pounds or 24 percent compared with 2015.
In the employment sector, there were 9,788 jobs at 160 processing plants in Alaska.
Among recreational anglers in Alaska, 319,000 people took more than 632,000 trips in 2015 and caught a total of 2.6 million fish. Catch included halibut, rockfish, Pacific cod, lingcod and salmon. Coho and chinook salmon were the most abundant in the catch numbers.
Economic impact numbers will be released by NOAA in an upcoming economic report, available at alaskafisheries.noaa.gov
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Naomi Klouda can be reached at [email protected]

Officials in the Alaska Dispatch News bankruptcy case probed further into former owner Alice Rogoff’s finances at a Nov. 2 bankruptcy hearing now on a search for other assets to turn into cash for creditors.
Progress on liquidating the assets not part of the $1 million sale of the ADN to the Binkley Co. has been slow due to the lack of assets to turn into cash, said attorney William Artus, who was hired to represent Nacole Jipping, the Chapter 7 trustee in charge of the liquidation.
“The bankruptcy case doesn’t have any money or assets to turn into cash to pay creditors, but we are exploring some new areas,” Artus said after the 30-minute hearing.
The hearing involved only questions between attorneys and Rogoff, as well as her former Chief Financial Officer Erin Austin.
Whether the new area moves into lifting the “corporate veil” infrequently allowed to remove the protection of a limited liability corporations remains to be seen, he added.
Another avenue, called the 2004 rule, will be pursued in December. That also allows a deeper look into Rogoff’s wealth and financial ledgers during her time as the owner of the company from April 2014 to September 2017.
“We’re looking at areas that could generate dollars. The trustee (court-appointed Jipping) will be working the case and there will be more,” he said.
Several steps moved the bankruptcy, declared on Aug. 12 by Rogoff, from the reorganization of Chapter 11 to the liquidation of Chapter 7.
According to Rogoff attorney Cabot Christianson, the Chapter 11 bills were paid. He filed a debtor’s final report to the court on Nov. 1 giving an account of payroll, insurance bills, rent for ADN properties, utilities and property taxes that amounted to more than $1 million paid by Sept. 22.
The money came from the Binkley loan-converted-to-purchase price of $1 million.
“Apart from professional fees that may be owed, there are no known unpaid claims that arose during the Chapter 11 phase of this case,” Christianson stated.
That still leaves most of the 190 original debts unpaid that were listed in the bankruptcy petition. The Municipality of Anchorage came off the list as $58,000 in property taxes was paid by Nov. 2, based on its senior lien and therefore priority to be paid.
Insurance for employee health and company liability also came off the list as priority payments.
No pending auction
No payments in the Chapter 7 phase have gone out to satisfy Rogoff’s more than $2 million in remaining unsecured debts owed to dozens of local contractors and unpaid vendors.
The Chapter 7 portion is a necessarily slow process, said Jipping, the Chapter 7 official handling liquidation. To date, no “proof of claim” request has been made of creditors to prove what is owed them, she said.
“First, we must determine on the assets to pay to creditors. Then we would send out a notice to them to file their claims of proof by a certain date,” Jipping said.
No auction has been scheduled to liquate whatever assets remain.
“We don’t have anything to auction off so we’re not planning on holding an auction,” Jipping said. “We’re looking into possible claims to assert which could bring money for creditors.”
The Binkleys were given first dibs on any of the Dispatch’s assets when the company purchased the newspaper.
They declined to take either of the large printing presses in order to pursue contract printing with Wick Newspapers, owner of the Mat-Su Valley Frontiersman in Palmer where the printing press is located.
Bankruptcy Judge Gary Spraker on Oct. 25 granted permission to abandon the Urbanite printing press located at 5900 Arctic Blvd., after the request to do so came from Jipping.
That takes another asset out of the possible property to be sold to pay debt, but Jipping had concluded that it would not supply income for the estate.
That printing press, purchased for about $2 million from J. Birket Inc. of Lebanon, Tenn., held outstanding debt of $161,044, according to the list of creditors supplied by Rogoff. Birket held a lien on the press, along with the warehouse owners, Arctic Partners.
The other printing press, a three-story Goss used since 1986 to print the Anchorage Daily News and later the Alaska Dispatch at 1001 Northway Dr., was shut down on Oct. 15. The building has been owned by GCI since 2014 and Rogoff was notified of eviction one day prior to her filing the bankruptcy petition.
So neither press, worth an estimated combined total of $2.5 million at the bankruptcy hearing in testimony by longtime pressman Ken Carter, were sold to help pay back the creditors.
At the Nov. 2 meeting of creditors — called a 341 hearing — Jibbing said she didn’t learn much new. At the hearing, attorney Artus questioned Rogoff and Austin about bank transactions and company names.
It circled back to known information from previous hearings: Rogoff paid more $4 million per year of her own money into newspaper operations from 2014-17, she said.
As money was needed to fill gaps between revenue and expense, Austin would request the additional funds, she said.
Ak Publishing Co. was merely the name of the financial company that paid the Alaska Dispatch bills, Austin said.
Other companies, such as the Moon and Stars Publishing Co. existed as the umbrella over websites Rogoff established, such as ArcticNow.com, NorthernLove.net and showmealaska.com. All of these continue to be active “to various degrees” but are not sources of income, Rogoff said at the hearing.
“We didn’t learn a lot from it (the hearing) really,” Jipping said. “Now we’re going to request a 2004 examination that will allow us to examine more. We will request it, and hold that in December. We should know more after that.”
A rule 2004 exam in a bankruptcy case involves a longer look-back at the company’s books. In this process, Rogoff must disclose debts, assets, income, expenses and financial transactions dating back as far as six years, though she had only owned the Dispatch since 2014.
“This is all in the research stage,” Jipping said. “We’re not looking at fraudulent actions.”
Limited liability
A key complaint by those owed money is that if Rogoff is a millionaire who owns a Cessna airplane, a distinctive home on Campbell Lake in Anchorage, and other properties on the East Coast with her billionaire husband, Carl Rubenstein, how can she claim she has no money to pay her bills?
“A lot of us want an answer to that question,” said Mark Miller, owner of M&M Wiring, which now shoulders a unpaid bill of $500,000 for contract work at the Arctic Boulevard warehouse. He’s not alone. Anchorage printing companies, retailers, national paper sources and even freelance writers are among the unpaid.
But a number of laws protect limited liability corporations, explained long-time Alaska bankruptcy attorney David Bundy, who is not an attorney involved in Rogoff’s bankruptcy but occasionally sits in on the hearings.
Corporations and limited liability companies, or LLCs, are both separate entities from their owners, Bundy said. A corporation and LLC will provide owners personal liability protection.
However, the “veil of limited liability” may be pierced in certain circumstances, causing the owner to be personally liable for the entity’s debts and judgments, he said.
“But there’s a whole legal process to make her produce it. The whole purpose of an LLC is to have a separate entity that the owners are not included in,” Bundy said. “The concept goes back a long way, to the Italians in the Middle Ages. You set up a company. Put money into it; people that deal with it are only dealing with a company and not you. Businesses couldn’t exist if this isn’t true.”
Bundy, who handled the historic airline Wien Air’s bankruptcy in the 1980s, the folding of the Anchorage Times in 1992 and other high profile cases, said sometimes one bankruptcy causes other bankruptcies in a community.
“I wouldn’t be surprised if that happens here. There’s only so much money to go around,” he said.
But if the corporate veil protecting Rogoff’s wealth were pierced, it would come in the form of an adversarial complaint filed to the federal bankruptcy court by the Chapter 7 official, said Erik LeRoy, who acts on behalf of the Binkley family.
Questions that begin to look at what is an Alice Rogoff loan with Northrim versus what was a company loan may be a look at making the distinction, he theorized.
A $10 million outstanding loan balance at Northrim Bank remaining from a $13 million personal loan Rogoff took out to purchase the Anchorage Daily News from the McClatchy Co. in 2014 may be just such an example.
LeRoy’s work on the Dispatch bankruptcy continues on because his client, the Binkley Co, continues to be called to testify.
“They hold the historical financial records for the company,” LeRoy said. “And in that role, they will continue to cooperate.”
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Naomi Klouda can be reached at [email protected]

Proponents of a road from King Cove to Cold Bay feel renewed hope under discussions with Interior Secretary Ryan Zinke’s administration for a different land swap than was proposed in the past.
King Cove Mayor Henry Mack said the application for the road is back before the U.S. Department of the Interior. Discussions involve setting up a federal lands appraisal process on 200 to 300 acres owned by the King Cove Corp. that could be swapped with the federal government for land to complete the road with an 11-mile connection through the Izembek National Wildlife Refuge to reach Cold Bay and its all-weather airport.
It’s a different day now. That’s what residents hoped when 82 out of 135 votes in King Cove were cast for President Donald Trump in the November 2016 election, said City Manager Gary Hennigh.
Under previous administrations since 1997, the community has struck out at attempts to gain the road. At issue is the wildlife refuge designation and its habitat for 98 percent of the Pacific black brant goose worldwide population, according to the Interior Department.
To show how much he’s hoping has changed, Hennigh recounts dealings with Zinke’s predecessor.
When Interior Secretary Sally Jewell visited King Cove on Aug. 10, 2013, Hennigh said he wanted to take a 10-minute detour to show off the city’s hydro project.
Delta Creek Hydro went online in 1994 and has saved the 900 residents of King Cove hundreds of thousands of dollars in utility costs. They pay 30 cents per kilowatt hour, a lot less than Sand Point’s 52 cents and Cold Bay’s 76 cents.
It’s clean and saves the city from burning 300,000 gallons of diesel a year.
But Jewell was on the ground in King Cove to see about the proposed road corridor from King Cove to the Cold Bay Airport. The people of this commercial fishing hub have fought for three decades to get a life-saving corridor — a modest one-lane gravel road — to link them to the airport at Cold Bay.
“She didn’t want to take the 10-15 minutes for us to show her Delta Creek, and let her know more about us,” Hennigh said. “She said she was there to ‘listen to the birds and animals, because ultimately, I’ve got to speak for them.’”
Hennigh and other city officials on the tour wanted to show Jewell that they care about wilderness, too. The road is for medical emergencies to the 10,000-foot civilian runway at Cold Bay built during World War II. During about100 days a year, the town sitting on the edge of the Alaska Peninsula is so snarled in storms that neither boats nor planes can make it.
“We’re proud of our renewable energy; I wanted her to give us the courtesy of 10 minutes so we could show we are a forward-thinking community,” the city manager said.
A few months later, Jewell rejected the proposed road on Dec. 23, 2013 on environmental grounds that it could negatively impact the Izembek National Wildlife Refuge. In doing so, she rejected a proposed land swap approved in 2009 legislation signed by President Barack Obama that would have traded refuge lands for thousands of acres of state and private land. The trade would have given the federal government 97.5 square miles for less than 3 square miles of refuge.
Angered over Jewell’s decision, the Alaska congressional delegation fought back.
As chair of the Senate Appropriations Subcommittee on Interior and Environment, Sen. Lisa Murkowski included a provision in the 2016 fiscal year Interior budget that calls for the state and the Interior Department to negotiate a “fair trade” land exchange that would allow the state to build the road.
Then Rep. Don Young saw his legislation passed in July that approved the King Cove Land Exchange Act in a House vote of 248-179.
That’s where King Cove officials are now, in their discussions with Zinke’s staff.
“Certainly, in my 28 years as city manager, now it is as close to happening as it has ever been,” Hennigh said. “But there are still a lot of variables.”
In new land selections, the variables relate to analyzing and appraising different tracts to determine if it is of equal value.
“It’s difficult to determine because it is remote land,” Hennigh said. “The value of the King Cove Corp. land will be similar to the federal government land in the Izembek.”
The same road restrictions also would be kept. King Cove is a major commercial fishing port, processing seafood all but one month of the year at its only plant, owned by Peter Pan Seafoods. The road wouldn’t be used for commercial purposes and no hauling of commercial fish products between King Cove and Cold Bay would be allowed.
The 2013 environmental impact statement, or EIS, had five alternative land exchanges and road alignments considered. In order to not trigger the need for a new EIS, which takes years, King Cove officials, the Department of the Interior and the city are looking within those perimeters.
Another avenue sought to fight Jewell’s ruling — a lawsuit lost in U.S. District Court — was set aside just last month, Hennigh said.
The Agdaagux Tribe of King Cove had filed suit against Jewell in June 2014 arguing she chose the no-action alternative from the EIS. The State of Alaska then joined the suit on behalf of the Alaska Native group.
In September 2015, U.S. District Russell Holland ruled against the Tribe. He wrote in a 38-page opinion that Congress gave the Interior secretary the option to select the no-action alternative, and thus Jewell did not violate the National Environmental Policy Act.
“Given the sensitive nature of the portion of the Izembek Wildlife Refuge which the road would cross, the NEPA requirement for approval of the proposed road probably doomed the project,” Holland wrote.
Under NEPA, Jewell had evaluated environmental impacts, not public health and safety impacts, Holland wrote.
The Tribe appealed the ruling, Hennigh said.
“About a month ago, we decided to drop the lawsuit. Not because we got scared away, but we finally accepted the reality that if we prevailed in the lawsuit, the most the court would do would be to require a supplemental EIS or whole other EIS process,” Hennigh said. “The administrative agreement that we believe will now see the light of day is what we’re putting our confidence in now,” he added.
Just last week, CNN camera crews with reporter Drew Griffin were in King Cove. The main topic was the fight to gain the King Cove Road. But Hennigh, in his interview with the journalist, also took his time telling him about the microgrid hydro project that keeps the lights on in King Cove.
“He heard my spiel about renewables, about how it is the right thing for the environment and we have the oldest single remote microgrid in Alaska,” Hennigh said. “I told him the story about Interior Secretary Jewell, that we wanted her to know — that we want people to know — we aren’t completely obsessed with this road.”
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Naomi Klouda can be reached at [email protected]

Despite its abundance, Alaska seaweed isn’t harvested for commercial use to the extent it can be found on local grocery shelves.
That’s potentially a loss for the Alaska economy as projections for the commercial seaweed market are expected to reach $22.13 billion by 2024, according to Global Market Insights.
What is stocked in dried spirulina and sushi ingredients tends to hail from Maine — a place where the waters aren’t as pristine as Alaska’s, said Udbhav Naidoo, a GCI solutions engineer who took part in the winning entry at the Ocean Technology Innovation Sprint, or OTIS, competition Oct. 27 at the Loussac Library in Anchorage.
OTIS is a program based on the Google Ventures Sprint process tapped by the Alaska Ocean Cluster Initiative to get ideas generated for sustainable ocean-based economic development projects. It engages innovators as they tackle business or market solutions.
In 40 days, five teams finalized five business ideas. Each concept met standards of feasibility, sustainability, desirability and viability in a marketing concept known as “human-centered design.”
Naidoo and Team Chukchi members came up with the Green Sea Bar made 20 percent of seaweed — a product no one else in Alaska has developed yet for the market. The recipe consisted of sesame seeds, cashews and maple syrup, ground together with wakame or edible seaweed, and baked.
The winning members are Caiming Li, a computer engineering student and software developer, Lowen Guzman a mechanical engineering student focusing on ocean energy, and Alyse Daunis program manager at Launch Alaska, as well as Naidoo.
Once Team Chukchi settled on the seaweed nutrition bar, they needed to come up with a prototype. Daunis spent a weekend on a Talkeetna getaway trip where she used a 50-year-old stove and a match to light the oven and bake the bars.
“We conducted taste tests, and the first ones didn’t work out so well,” she told the audience.
The team had placed the bars next to each judge’s spot. Gunnar Knapp said he didn’t know it was part of a team’s presentation, but ate it and found it quite good.
Forty days before the event, none of Team Chukchi members had met.
Together with 25 others, they signed on to brainstorm in smaller teams through the ideation process, eliminating 25 to 30 proposals before settling on the seaweed bars.
Each team was close to having a marketable project, but may have a ways more to go working out the kinks, said organizer Joel Cladouhos, executive director of the Alaska Ocean Cluster Initiative.
“Everyone was great. I’m sure it was difficult to pick a winner,” he said.
Team Pacific analyzed ways to better count fish. For all Alaska’s seafood wealth and recognition for sustainable yield fisheries, the weir counting system still boils down to counting “one fish, two fish,” said team leader Jared Fuller, a chief technical officer of electronic monitoring at Saltwater Inc.
Though Alaska has thousands of productive salmon streams, only a portion are monitored by the Alaska Department of Fish and Game due to the expense, Fuller said. They came up with an idea for species recognition counts via a camera that can be placed at more rivers and bring down the expense.
Team Arctic came up with a product that identifies bycatch and releases them through a hatch in another fish recognition system.
Team Beaufort came up with a small consumer tidal energy product that can be built to scale for small boats or small communities.
A virtual team called Team Bering Sea, led by Jay Carpenter, the director of technology at APICDA Joint Ventures, came up with an app that will allow marine industry occupational licensing and other online education courses. Members of this team met on Skype from Fairbanks, Homer, Louisiana, Juneau and Anchorage.
A panel of judges posed questions to each team on the feasibility of their products before announcing the winner. They were Christi Bell, director of the UAA Business Enterprise Institute; Gunnar Knapp, retired from the Institute for Economic Research, Jim Jager, Port of Alaska external affairs director, and Wanetta Ayers, executive director of the Prince William Sound Economic Development District.
Likewise, each team also had access to solid mentors in the topics they took on.
Mentors included Nigel Sharp, the Global Enterprise Entrepreneur-in-Residence at the University of Alaska Anchorage Business Enterprise Institute, Cladouhos and Rachel Miller, an associate business professor at Alaska Pacific University named the Walter Hickel Professor of Strategic Leadership and Entrepreneurship.
For their efforts, the Chukchi group wins a trip to network and learn more about the blue ocean economy at Blue Tech Week in San Diego, a meeting that includes professional mentorship and coaching. They also win a Kenai Fjords National Park cruise.
All together, it was an amazing group of people to work with, Naidoo said.
“One of most impressive things is that none of them were familiar with this. Alyse said she cooks ‘sometimes.’ Li and Lowen didn’t know about ocean resources. But they put in a ton of work to get up to speed and learn.”
They aren’t sure what the next step will be in terms of moving forward to market their product.
“As a group we’ve all decided we want to be involved in the development of a seaweed product,” Naidoo said. “We will continue the conversation.”
Naomi Klouda can be reached at [email protected]

The award-winning University of Alaska Anchorage Seawolf debate team argued the question of whether America should adopt a single-payer health care system on Oct. 25 before a Commonwealth North audience.
On the pro side was Jacob Sherecliffe, a senior and Truman Scholar majoring in political science, and Sarah Gray, a junior majoring in nursing. On the con side was Genevieve Mina, a junior with a biology-political science major, and Robert Hockema, a junior majoring in international relations.
Gray argued access to health care is a fundamental human right, relating to the proclamation in Article 25 of the Dec. 10, 1948, Universal Declarations of Human Rights: “Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services.”
“There is inaccessibility in the status quo,” she said.
Modeled after the Canadian and the United Kingdom systems, an American system would sweep in the 44 million families that reported at least one uninsured member on their IRS tax forms, Gray said. Spread across more people, the cost of paying for health services goes down.
“That’s almost the same as the entire population of the Ukraine. Why deny the population of an entire country access to the health care system?” Gray said.
An unequal system exists now between those who don’t have good insurance and the privileged that do, she argued, and single-payer evens the distribution so all can have access.
According to the National Association of Insurance Commissioners, Gray said, some 5,926 insurance companies operate in the U.S. Eliminating them cuts paperwork for a savings that can be applied to the single-payer system.
The ability of a government-led health care system means spending virtually nothing on advertising, Gray said. Governments can negotiate for more favorable prices from providers and hospitals.
Bypass surgery in the U.S. cost $73,000, versus the same procedure cost of $23,000 in France where they have a public-private partnership to cover health, she said.
Gray gave a cost analysis comparison to roads. If you increase taxes to pay for better roads maintenance, it will cost less in the long run than building new ones.
Health care savings in the long run come from better coverage through a single-payer system at lower costs, she said, and savings comes from taking resources out of a system that currently goes into administering and advertising the private health insurance system.
Genevieve Mina “deconstructed” Gray’s contentions by saying eliminating advertising costs would save mere pennies.
“It won’t work in the U.S. High costs are the true evil in American health care,” she said.
The other big question is how to pay for it? Increasing taxes to pay for it would prove problematic, she said.
“Universal coverage is a good thing but the problem is how to get it — through a single-payer or multi-player system?” Mina asked.
Another weakness in the American health care construct is the lack of incentive for hospitals and providers to help bring down costs, Mina said.
“In fee-for-services, hospitals simply applied to increase their Medicaid payments. Sure, some went for new equipment and procedures, but millions and millions of dollars went to CEOs and higher wages,” she said.
Mina, and later her partner Hokema, countered that America’s system would fail when it is government controlled. They gave examples from Vermont, the home state of Democratic presidential candidate and single-payer advocate Bernie Sanders, where 11 percent tax hikes went to pay for a single-payer system and in the first year alone its program cost $2.5 billion.
Politicians have an incentive to not regulate prices or cause price containment due to the lobbying efforts they succumb to, Mina argued. Hospitals can apply to increase Medicaid payments, so there’s no ability to bring the costs down through political pressure.
“Special interests inherently control Washington,” she said. “They have a powerful interest against change and will get as much as they can out of the single-payer system.”
Sherecliffe proposed that people simply want health care that is adequate and of good quality.
“People don’t care where a restaurant gets their avocados from, but they do want good guacamole,” he said.
High costs in America’s current system come from people who wait too long to get attention for an illness or chronic condition. By having insurance and emphasis on preventive care, the costs to the system go down, Sherecliffe argued, and added that lobbying in Washington could be outlawed to avoid the mess of over-influencing a political outcome.
States that see the highest health care costs — such as Alaska — would go into a pool of coverage that includes people from lower-cost states. A government pool could negotiate for lower drug prices and allow everyone to pay less, he argued.
But Hokema countered that it will cost far more to bring in a new system when holes can be poked to undermine it, such as is occurring to the Affordable Care Act, or Obamacare, under the Trump administration.
Those who have insurance now that they are perfectly happy with will have to move to system that likely won’t pay as many benefits, Hokema said. When cutting the pay for rich CEOs, health field jobs would also get cut, causing an economic problem in another direction, he added.
This leaves it open for a projected loss of 800,000 jobs, Hokema said.
He also predicted the single-payer system would be prohibitively expensive, as California found estimates of such a system came in at $400 billion per year. Estimates for Sanders’ single payer plan are $1 trillion the first year alone.
The con side premised their arguments on the better ability of a free-market system to force changes. This takes it out of the political arena where “opposition parties control the narrative,” such as occurred in the ACA debates, he said.
“We need to solve the problems… Try price transparency. Through competition there is an incentive to reduce prices,” Hokema said.
What America needs is an incentive to remove “anti-competitive behavior” that came about through hospital mergers across the nation in the past few decades. A public-private system — such as seen in France — offers ways to do that, he said.
“How you get there is important,” Hokema said.
Two of the three judges gauging the debate sided with the pro single-payer team. Karen Hunt, a retired Alaska Superior Court judge, said she wasn’t convinced that “people can’t change” is a valid argument against trying a single-payer system. She also had more faith in the government’s ability to bring down health care costs by expanding on what is already in place.
Dr. Tom Nighswanber, an Alaska Native Medical Center physician who also is a retired University of Washington professor, likewise was more convinced by the pro camp.
He agreed that doctors do keep up prices and costs by creating demand. If you come for a headache, for example, the doctor can recommend a CAT Scan.
“I have colleagues in the U.K. and they don’t want to give up their (single-payer) system,” he said.
Judy Brady, the third judge and a former Department of Natural Resources commissioner, said she has heard about corruption in the Canadian Health Care system. To get good health care in Canada, “you barter behind closed doors or pay under the counter,” she said. She sided with the anti-single payer team.
Those attending the Commonwealth North luncheon voted 67 percent to 31 percent against the pro single payer system arguments.
Over the last two years, the Seawolf Debate program brought three teams to the Worlds Debating Championships and climbed in the official World Debate Council’s ranking to the 9th most competitive program in the world based on its cumulative success at the last five World Universities Debating Championships. This ranking places the team in second-highest team from the United States, Coach Steve Johnson told the group.
Naomi Klouda can be reached at [email protected]

The State of Alaska filed a lawsuit against Purdue Pharma on Oct. 31, claiming the pharmaceutical company that makes the drug OxyContin used fraudulent marketing and is responsible for the widespread prescribing by doctors that resulted in Alaska’s opioid crisis.
The lawsuit was filed in Alaska Superior Court with backing from Gov. Bill Walker.
The governor tied the recent crime surge to the opioid epidemic.
“We have people becoming criminals to feed their habits,” Walker said in a prepared statement announcing the lawsuit. “We have grandparents having to take care of grandchildren because the parents have fallen into the spiral of addiction or worse, have died from an overdose. And the worst part is a lot of these people would have never become addicts without that initial prescription that went on too long.”
The 84-page filing begins by chronicling Alaska’s opioid crisis with the declaration by Gov. Walker on Feb. 14 of a public health emergency. The lawsuit contends that the crisis is stretching state resources to the point that state agencies can’t keep up.
Alaska’s lawsuit follows on the heels of those filed recently in Washington, West Virginia, New Jersey, New Mexico, Mississippi, Ohio, Missouri, New Hampshire, Louisiana and South Carolina.
Attorney General Jahna Lindemuth said her office hired the firm Motley Rice on a contingency fee basis this summer to investigate whether any manufacturers or distributors of opioids had violated state consumer protection laws. The investigation, as explained in the lawsuit, uncovered that the majority of Medicaid spending on brand-name opioids was for OxyContin.
The suit contends Alaska’s opioid epidemic is largely caused by Purdue Pharma’s actions to persuade doctors and patients that compassionate treatment of pain requires opioids.
Purdue has claimed such drugs may be used long-term to treat chronic pain without causing abuse and addiction. In response to lawsuits, the Stamford, Conn.-based Purdue said in a statement it was “deeply troubled” by the opioid crisis and that its U.S. Food and Drug Administration-approved products account for just 2 percent of all opioid prescriptions.
“We vigorously deny these allegations and look forward to the opportunity to present our defense,” Purdue said.
The company is owned by the billionaire Sackler family featured in a New Yorker magazine article this week. It is not a publicly traded company.
The state contends the opioid epidemic in Alaska is a direct outcome of medical treatment.
“The toll of opioid overuse, abuse, addiction, and death in the state is not the result of pain conditions warranting the use” of this class of these drugs, it states.
Prior to Purdue’s campaign, back in the late 1970s doctors only used opioids for short term acute pain or for cancer patients because the drugs were seen as “too addictive and debilitating to be used long term and inappropriate, therefore, for chronic pain,” the suit alleges.
But Purdue transformed medical thinking by persuading doctors that the risk of addiction is modest and outweighed by the patient benefits in reduced pain.
Patients also trusted opioids because their doctors prescribed them, according to a report from Alaska patients surveyed and cited in the lawsuit.
“Rather than dispel that false confidence, Purdue’s marketing deliberately stoked it,” the lawsuit states.
The prescription opioids are especially dangerous because it ties patients to a drug that can kill them, yet they cannot stop taking it due to the addiction. The state links current heroin addicts to patients who were first exposed to opioids in their prescriptions.
In 2011, Alaska saw 66 fatal opioid overdoses. By 2016, that number reached 96, adding up to 476 deaths over those six years, the lawsuit states, quoting state Department of Health and Social Services numbers.
“Beyond overdoses, Alaska hospitals have struggled to deal with other effects of the opioid epidemic. Doctors and administrators report dealing with patients who threaten violence or suicide if they are not given prescription opioids. One doctor describes opioids as a daily part of practice — from patients seeking refills to patients with complications from injecting opioids, to patents in active withdrawal from opioids,” the lawsuit states.
Depending on the day, 15 to 30 of the patients in one emergency department will be on issues related to opioids, an Anchorage doctor stated in the suit. Hospitals report dramatic increases in infections such as Hepatitis C and endocarditis or infections of the heart that are related to opioid abuse.
Police cases also record the epidemic. An increase in opioid supply and demand was reflected in Purdue’s OxyContin and generic oxycodone seized in Alaska. Seizers increased from 1,183 doses in 2014 to 4,552 in 2016.
“Prescription deaths have been linked to homicides, assaults, home-invasion thefts, property thefts, driving under the influence, prostitution, pharmacy robberies and the use of methamphetamines,” the lawsuit states.
In further showing the widespread problem, the Department of Law quotes a report that as many as 80 percent to 90 percent of Anchorage’s high school students report that the pain pills are readily available in their homes.
To get their products into more doctors’ hands, the suit alleges Purdue engaged in aggressive branding and giveaways: stuffed animals, CDs, clocks and luxury getaways for top OxyContin sellers and prescribers.
The state describes how Purdue used “key opinion leaders” or KOLs, to deliver paid talks providing information on treating pain and the risks/benefits of opioids.
“These KOLs served on the boards of patient advocacy groups and professional associations, such as the American Pain Foundation and the American Pain Society, that were able to exert greater influence because of their seeming independence,” the suit alleges.
Although this complaint has been filed, the Attorney General’s Office continues to investigate whether additional claims should be brought against other manufacturers and distributors, said Assistant Attorney General Cynthia Franklin.
The state makes six claims for relief. Unfair trade practices can include non-monetary relief such as cease and desist orders. It can also include restitution and a provision for civil penalties, Franklin said.
“The number of violations becomes a jury issue. When one of these lawsuits is tried, the jury determines the number of violations. Then the court assigns the dollar amount per violation. The minimum is $1,000 per violations and the maximum is $25,000 per violation,” Franklin said.
The state is not alleging a number of violations at this time, but it would be “somewhere in the several thousands,” she said.
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Naomi Klouda can be reached at [email protected]

Alaskan ivory carvings are not only gaining a bad rap from a ban on elephant ivory. Rural economies are suffering in the confusion.
Fossilized ivory and walrus ivory carvings created by Alaska Natives are the focus of a renewed public relations campaign to stress to other states that there is no ban on legally obtained Alaska ivory artifacts and art pieces.
At the Alaska Federation of Natives convention in Anchorage in a recorded message played Oct. 19, Interior Secretary Ryan Zinke used part of his address to reassure delegates.
“On the policy side, we are protecting your right to sell walrus ivory. It is different from banned elephant ivory and it’s important to make that distinction,” Zinke said.
A couple of developments are underway to emphasize that Alaska ivory carvings are legal on the world market. One is a bill introduced in the Senate last week by Sens. Lisa Murkowski and Dan Sullivan informing other state legislatures they cannot ban the sale of legal Alaskan ivory art carvings. Called the Allowing Alaska Ivory Act, a companion bill is to be introduced in the House by Rep. Don Young this week.
The legislation would preempt states from banning walrus ivory or whale bone products that have been legally carved by Alaska Natives under the Marine Mammal Protection Act. The bill also preempts states from issuing bans on mammoth ivory products.
The second development is a resolution passed by the AFN delegates at the Oct. 19-21 convention. The resolution is “in support for Eskimo Walrus Commission Opposition of, including legally obtained walrus, mammoth, and mastodon ivory, in the African elephant ivory ban laws in the United States.”
The resolution, drafted by the village of Savoonga, spells out the trouble that’s been caused: “These ivory ban laws fail to acknowledge the difference … and the ivory ban state laws may cause residents of those states to face prosecution for buying, owning or bringing home legally acquired ivory from Alaska.”
This negatively impacts Alaska Native artists who depend on the sale of their handicrafts as a source of important income in a cash-limited economy, the resolution states.
The AFN resolution is a request to the congressional delegation to take action making sure other states know Alaska ivory is not to be equated with elephant ivory.
The use of legally acquired walrus, mammoth, and mastodon ivory by Alaska Native carvers to create tools, handicrafts, jewelry and artwork is a longstanding cultural tradition that continues to be a vital component of Alaska Native cultures, said Young’s spokesman, Matt Shuckerow. He noted that setting the record straight is also important for the millions of visitors who come to Alaska each summer and seek out legal ivory purchases.
“We’ve received a lot of calls and understand that it is impacting the economies in the villages,” he said.
Murkowski, Sullivan and Young were already working on the problem through a series of actions in response to the same request at last year’s AFN. In addition to drafting legislation, they sent a letter Oct. 17 to the president of the National Conference of State Legislatures in Washington D.C.
The bottom line of the letter was to inform state legislatures about the legality of mammoth ivory that comes from extinct animals and the legality of Alaska Natives’ ability to hunt walrus.
“While we can all agree that measures must be taken to combat the elephant poaching crisis, harming Alaska’s rich cultural traditions and rural economies will do nothing to achieve additional conservation benefit,” the letter read. “We call on you to consider the impacts that the existing bans are having and that other potential bans could have on Alaskans, and your constituents who travel to Alaska.”
A separate letter was addressed to California Gov. Jerry Brown. The California legislature enacted a law stating that California Fish and Game defines the term “ivory” to include a tooth or tusk from a species of mammoth, mastodon, walrus, whale or narwhale as containing ivory. All of it is lumped together with Asian and African elephant ivory, though it makes some exceptions for legal placement of ivory in guns and other items.
Murkowski asked Brown to consider “whether well intentioned legislation to protect global elephant and rhinoceros stocks is causing inappropriate adverse and unintended consequences to indigenous economies.”
Sullivan said the Allowing Alaska Ivory Act bills are meant to “cut the confusion, and carry out the true intent of our existing laws to allow Alaskan Natives and Alaskans to responsibly use their resources to access economic opportunity while maintaining centuries old cultural practices.”
It’s also aimed at a number of states that have enacted legislation claimed to be combating the illicit elephant ivory trade, Murkowski said, but sweep in Alaskan ivory along with it.
“The legislation being passed by many of these states would prevent Americans from purchasing and possessing traditional Alaska Native handicrafts derived from marine mammal and locally found fossilized Mammoth ivory, thus destroying a legal and cultural tradition,” Murkowksi said.
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Naomi Klouda can be reached at [email protected]

Alaska could save millions of dollars by transferring services through a “historic compact” signed by Gov. Bill Walker and tribes to provide child welfare services.
The new compact recognizes the authority of Alaska Tribes to provide services previously only delivered through the Office of Children’s Services. Lauded as the first of its kind in the U.S., it was signed at the 51st annual Alaska Federation of Natives Convention Oct. 19.
Walker used his AFN address to make the announcement, which was greeted with thundering applause from the delegates representing Alaska Native regional and village corporations.
Under the compact, Alaska Tribes and Tribal organizations will provide identified child welfare services that would be otherwise provided by the Alaska Office of Children’s Services. This includes intake, screening and investigating abuse or neglect cases. It includes searching for relatives of children brought into the system, developing and managing safety and case plans; foster care licensing and support; supervised visitation and transportation, adoption and guardianship home studies.
The agreement came about after eight months of “intense negotiations” between the Department of Health and Social Services, headed up by Commissioner Valerie Davidson, and 18 tribes.
The tribes included those from Kodiak, Mentasta, Eyak, Kawerak, Kotzebue, Nome, the Aleutians, Cook Inlet Tribal Council, St. Paul, Bristol Bay and the Arctic.
Richard Peterson, president of the Central Council of Tlingit and Haida Indian Tribes that was one of the primary groups negotiating with the state, called the compact “every bit as historic as the Alaska Native Land Claims Settlement Act.”
“It recognizes government-to-government tribal sovereignty,” Peterson told the delegates at the convention after the governor’s announcement.
The term “sovereignty” carries a legal meaning that mostly pitted state officials against Tribal leaders in the past, Peterson said. Alaska governors have sued Tribes under circumstances when state rights were seen as paramount, such as the long-running subsistence disputes.
Walker and Lt. Gov. Byron Mallot have embraced handing over more power to Tribes, or acknowledging them in government-to-government ways, he said.
Walker emphasized fixing a problem experienced by Alaska Native families and children.
“My administration is committed to reducing the disproportionate number of Alaska Native children in our foster care system,” Walker said. “This compact is the first of its kind for both Alaska and the United States. I thank the Department of Health and Social Services, Department of Law, and Alaska Tribes and Tribal organizations for crafting this unique new partnership.”
Alaska Native children have been disproportionately represented in the state’s foster care system for decades. While only 19 percent of Alaska children are Native or American Indian, 55 percent of Alaska children in out-of-home foster care are of Native descent, and 61 percent of Alaska Native children in foster care will ultimately be placed in non-Native homes.
Meanwhile, in the crunch of Alaska’s fiscal crisis, OCS has come under fire in several lawsuits for harm brought to children while under its care. The state has consistently blamed a lack of funding to hire more caseworkers as part of the problem. Christy Lawton, director of OCS, attended the convention during the governor’s announcement.
“Despite our agency’s dedicated work and efforts we haven’t been able to turn the curve for Alaska Native children with a different outcome,” Lawton said.
She believes the move — which goes into effect in early 2018 — will refocus help on more than half of OCS’s caseload.
The recommended national standard is 12 cases per child services worker. Alaska OCS workers carry between 16 and 50 cases per worker. At a time when the state is running deficits of more than $2 billion per year, increases to hire more workers were minimal in the fiscal year 2018 budget.
“This lack of resources, combined with unprecedented fiscal and social challenges facing our state, has led to high worker turnover at Alaska OCS offices,” Walker said.
State savings will come from a switch to more federal grant availability that already helps pay for some Tribal children welfare services. It will create more training and job opportunities for Tribal administrations.
Yet, so far, more detailed financials of the compact aren’t known, Lawton said. DHSS’s budget for 2017 was $151 million.
“Alaska Tribal Child Welfare Compact is budget neutral and there are no plans to ask for an increase in funding because of the signing of the compact,” Lawton wrote in an email to the Journal. “There is not a dollar estimate for how much money will/could be saved by the Department of Health and Social Services and more specifically the Office of Children’s Services. We have no way to tell how much money would be saved until we see who is interested in taking over what roles and more time passes.
“This compact provides a more local approach for child welfare services, potentially faster responses, and helps to alleviate high caseloads in other parts of the state. It will also serve children and parents in their home communities, helping them to maintain their cultures and traditions.”
How that will work out remains to be seen. But Speaker of the House Bryce Edgmon, D-Dillingham, called Oct. 19 “a historic day” when it comes to new public safety arrangements that can be made with Tribes.
“This new compact recognizes that Tribes have a responsibility to care for their people and it allows them to take over or assist in the delivery of essential services and programs,” he said.
“Tribes have always been at ground zero when it comes to public safety and the well being of our children,” said Bush Caucus co-chair Rep. Zach Fansler, D-Bethel. “This compact will create greater opportunities for tribes to do things better and more efficiently than the state government, which is currently hampered by a fiscal crisis and budget cuts that leave too many children in danger.”
Naomi Klouda can be reached at [email protected]

Arctic Slope Regional Corp. Executive Vice President Tara Sweeney’s nomination to assistant secretary of Indian Affairs is the latest signal that the Trump administration plans to involve Alaskans in helping to shape federal policies on everything from oil development to environmental cleanup.
US. Department of the Interior Secretary Ryan Zinke, appearing in a pre-recorded statement, told delegates at the Alaska Federation of Natives convention on Oct. 20 in Anchorage that he was honored to announce the first Alaskan Native ever to go before a Senate confirmation committee. Her nomination was previously announced from the White House on Oct. 16.
Zinke lauded Sweeney’s background from serving 20 years with the Arctic Slope Regional Corp., most recently as executive vice president of external and government affairs, to committee work and as co-chair of AFN. If confirmed, she will oversee the Bureau of Indian Affairs and the Bureau of Indian Education within the Interior Department.
Zinke said he had wished to speak before the AFN delegates live via video conferencing, but was attending a family member’s funeral in Montana.
“She knows the key to unlocking the economic potential of tribal and Native communities is regulatory reform. And we are streamlining our operations. This includes everything from streamlining the permitting process to development (projects) to the clean up of contaminated lands,” Zinke said. “Under the Trump Administration, Alaska has scored major victories” in appointments that, including Sweeney, now number six.
Chris Oliver is now the administrator of National Marine Fisheries Service, and was the former executive director of the North Pacific Fishery Management Council.
Former Alaska Department of Natural Resources Commissioner and most recently chief of staff to Sen. Dan Sullivan, Joe Balash is the Interior Department Assistant Secretary for Lands and Mineral Management.
Drue Pearce, a former state legislator, Interior Department advisor and federal gasline coordinator for Alaska, is the new Deputy Administrator for Pipeline and Hazardous Materials Safety Administration, an office in the US Department of Transportation.
Chris Hladick, most recently the commissioner of the Alaska Department of Commerce, Community and Economic Development, was named administrator of EPA Region 10 on Oct. 17.
Steve Wackowski, a former campaign manager for Sen. Lisa Murkowski, is now Zinke’s Alaska affairs advisor for the Interior Department.
Arctic Slope Regional Corp. consistently tops the Alaska Business Top 49er list as the largest locally-owned and operated business in Alaska, with revenues in excess of $2 billion and more than 10,000 employees worldwide.
Sweeney is known for advocacy of Alaska Native rights and promoting local programs that focus on cultural values, practices, and traditions. She also mentors young ASRC shareholders interested in becoming politically active. She also was honored in 2008 as a Top Forty Under 40 business leader by the Alaska Journal of Commerce, and has served on numerous business and non-profit boards, including the Alaska Federation of Natives.
“Tara hasn’t been confirmed yet, so she is constrained in what she can say,” AFN President Julie Kitka said, introducing Sweeney at the convention to a standing ovation.
During Sweeney’s brief appearance, she said she feels honored to be nominated for the post.
“I am almost an empty nester so I have a lot of time on my hands coming up. I’m certainly up for the task, if I am confirmed,” she said, referring to her two children. “I hope that I will represent Alaska and the Native Alaskan community well.”
Kitka noted that the late Morris Thompson of Tanana served as a Bureau of Indian Affairs commissioner from 1973-76, the first Alaskan in that post, at the crucial time after the Alaska Native Lands Claims Settlement Act.
“Today is no less important. This is a signal the administration wants to reach out to Alaska Natives and involve us in the very heart of the federal government,” Kitka said of Sweeney’s nomination. “My question is: are we up to the task?”
Kitka, who met on three previous occasions with Zinke, including during his Alaska visit in May, characterized Sweeney’s nomination as the “first significant outcome of our work with the new Trump administration.”
With Zinke, Sweeney will oversee a $2.5 billion budget and “trust responsibilities” to American Indian tribes, including all 562 federally recognized tribes, she said. Of those federally recognized, 229 are in Alaska.
“This is a crucial and powerful position in fulfilling the trust responsibility to tribes and individual Indian trust benefits, as well as tribal sovereignty,” Kitka said. “This is a crucial time for new ideas.”
Kitka predicted the “results-driven” Sweeney “will serve as a strong assistant secretary for Indian Affairs. Her experience with empowering Native Americans is unparalleled and she will help all tribes achieve great self-determination.”
Up until this past August, Sweeney also was chair of the Arctic Economic Council. Former Lt. Gov. Mead Treadwell, who served with her, said Sweeney distinguished herself as the first chair of the Arctic Economic Council.
“She recognized the global nature of her job, as the future of jobs and investment in the Arctic depends on global capital and global customers,” he said. “She was magnificent in making sure the needs of indigenous residents of the Arctic were communicated to the Arctic investment community.”
As supervisor of BIA, Treadwell believes she will do what she can to build jobs, sustainability and wealth for America’s indigenous people.
“She comes with the experience of having helped run one of the most successful indigenous corporations in the world — and raised a movie star son in the process,” he said, referring to Ahmaogak Sweeney, the little boy who stole hearts in “Big Miracle: Everybody Loves Whales,” also starring Drew Berrymore and John Krasinski.
Sweeney has pushed for Congress to open the Arctic National Wildlife Refuge to energy development. ASRC owns subsurface rights and the Kaktovik Iñupiat Corp. owns surface rights to land within ANWR where development could occur. Native residents anticipate jobs, revenues and economic growth if Congress takes action.
Alaska’s congressional delegation had strong words of praise.
“With her long history of advocating for Alaska Native cultural values, rights, and economic opportunity, I can’t think of anyone better to have as our nation’s next Assistant Secretary for Indian Affairs,” Sullivan said.
Murkowski ticked off Sweeney’s qualifications for the job.
“Tara has a very strong record of professionalism and accomplishment in Alaska, across the country, and internationally, especially with the indigenous people of the circumpolar north,” she said. “She has significant experience on Arctic issues and chaired the Arctic Economic Council. She is an expert on energy, infrastructure, broadband, economic development, Native self-determination, and a wide range of policy issues that will come before her. Secretary Zinke could not have chosen a better leader to help him fulfill the federal government’s trust responsibility, and I know Tara has the heart and drive to excel in this position.”
Rep. Don Young thinks Sweeney may be able to help sort out the beleaguered BIA.
“Tara’s knowledge, experience and leadership will go a long way in straightening out the BIA, allowing it to run more efficiently for the good of all First Americans,” Young said. “She has extensive experience not only in business, but also within Alaska Native groups and organizations. Tara knows first-hand the fight for Native empowerment and self-determination because she’s been on the front lines for years.
“There’s long been a problem with Native issues not receiving the priority they deserve but with Tara Sweeney at the helm, I have no doubt the Department of Interior will be paying close attention and the voices of our Native communities will be heard. Tara follows in great Alaskan footsteps, those of my dear friend Morris Thompson, and will do a fantastic job working on behalf of American Indians and Alaska Natives across the country.”
The National Congress of American Indians looked forward to Sweeney’s confirmation, according to President Brian Cladoosby.
“The Assistant Secretary for Indian Affairs is charged with the federal responsibility to protect tribal sovereignty, treaty rights, and the trust relationship,” Cladoosby said. “We appreciate the administration’s commitment to efficiently staffing important positions within governmental departments directly affecting Indian Country, and we look forward to hearing from Ms. Sweeney about her goals and plans for working with tribal leaders to ensure the government-to-government relationship is upheld.”
Sweeney has lived most of her life in rural Alaska. She graduated from Barrow High School in 1991, and then left Alaska to attend Cornell University in Ithaca, New York. Sweeney graduated with a bachelor’s degree in industrial and labor relations.
Naomi Klouda can be reached at [email protected]

U.S. Coast Guard medic Erin Murray had set her sights on search and rescue operations off Kodiak Island for the kind of work that involves being lowered from a helicopter to save drowning crewmen after a boat capsizes.
After years of being fit — soccer, tennis, workouts to maintain the regime of military fitness — at the age of 29 Murray found herself limping.
“In March of 2016, I had a knee injury and I couldn’t pinpoint the cause,” she said. “Working out made it worse. I couldn’t climb the stairs without holding on to the railing.”
Three doctor referrals later, Murray flew from the Coast Guard base on Kodiak to Anchorage and met Dr. Doug Vermillion at the Orthopedic Research Clinic of Alaska. An MRI showed a huge piece of cartilage floating behind Murray’s kneecap.
“I had a huge hole where the cartilage should be,” she said.
Vermillion recommended an innovative treatment called MACI, a procedure that repairs cartilage using the patient’s own cells.
Vermillion took a biopsy of tissue samples the size of a couple of Tic Tacs from Murray’s knees. Using her own cartilage cells, the procedure grows new cartilage in 6 to 8 weeks at a lab in Cambridge, Mass. The new cells were later implanted back into Murray’s knee to allow for re-growing her own natural cartilage.
Glue holds the MACI implant in place as opposed to sutures, making this a faster and less invasive procedure. MACI is the first product approved by the Food and Drug Administration that applies the process of tissue engineering to grow cells on scaffolds using healthy cartilage tissue from the patient.
MACI procedure
MACI stands for matrix-induced autologous chondroycte implantationm, but its common name in the US is Autologous Cultured Chondrocytes on Porcine Collagen Membrane. The procedure became available in 2013 after FDA approval. MACI engineering is done at the Vericel Corp. Lab in Cambridge.
MACI focuses on the articular cartilage defect of the knee. The articular cartilage is a tissue that covers the surface of joints and is responsible for pain-free movement. If damaged, the ends of the bones rub against each other and cause pain, swelling and catching in the knee.
MACI is a two-step process.
“First you harvest the healthy cartilage cells from the non-weight bearing area of the bone,” Vermillion said. “These chondrocytes are then sent to the laboratory where the cells are cultivated for four to six weeks.”
Or, the cells can be harvested while a person is healthy and injury-free. A cryogenic lab in Cambridge can store the cells for five years and then make them available as needed, returning the person’s own healthy cells back for the implantation.
The second stage is an open procedure or arthrotomy. A small incision is made to the exposed the area of cartilage damage. The chondrocyte cells that have been seeded onto the collagen membrane are implanted into the defective area of the knee, Vermillion said.
And, instead of micro-suturing, MACI — prepared in 3 centimeter by 5 centimeter sheets — can be cut precisely to match the defect and positioned using surgical glue.
First in Alaska
Vermillion, an orthopedic surgeon who retired from the U.S. Army in 2002, saw a lot of knee injuries while treating soldiers, but not much was available other than surgery. At his residency at the Fort Sam Houston Brooke Army Medical Center in San Antonio, Texas, he saw active duty soldiers injured from jumping out of Humvees or hit by explosions.
“One had a big rock hit his knee. Another was injured jumping off a track vehicle at night,” Vermillion said. “They wake at 5 a.m. and run 10 miles without regard to how they feel doing it. At 25, they get these knee injuries. We didn’t have much to offer the active duty solders.”
It was gratifying to find an alternative to knee replacement surgery or signing off on a soldier’s disability. To watch active duty enlistees forced to give up their military roles to disability means loss on a number of levels, he said.
Because knee replacements last only 20 years or so, a young person has to look forward to least a second replacement in his or her lifetime.
Vermillion was able to learn an early version of the MACI procedure, this one developed in 1986 by Swedish medical doctor Lars Peterson of the International Cartilage Repair Society. He developed procedure that involved growing patients’ own cartilage cells in test tubes.
Out of 25 soldiers who received the procedure in the 1990s, 18 of them went back on duty, Vermillion said.
“The military doesn’t lose their expertise after getting them trained to do maintenance for an aircraft carrier or a nuclear submarine. These patients went back on duty. With MACI, after surgery, they can keep working. They’re only disabled while healing nine to 18 months,” Vermillion said.
Through the years, Vermillion figures he has used that procedure on about 100 patients suffering from bad knees. He even re-did his own knees at the age of 45.
The MACI procedure is more advanced. It holds the cells in place better, more equally distributes the cells across a joint and carries better results, he said.
Vermillion, now 60, graduated from West Point Academy with an engineering degree, then attended medical school at the University of Utah in Salt Lake City before joining the Army as a surgeon. Because he had a background in both engineering and medical school, he said he was drawn to how new technologies can solve medical problems.
Vermillion has now practiced the past 10 years in Alaska, from Orthopedic Research Clinic of Alaska or ORCA, located by the Alaska Regional Hospital. He has performed about five MACI surgeries in Anchorage and believes he is the only doctor so far using the technology.
Murray, now eight months after surgery, is glad she benefited at the cutting edge of this newly available procedure.
“I’m not allowed to run yet,” she said. “But I’m back on the treadmill.”
Thanks to the surgery, she plans on continuing to push herself in new directions. Only, instead of the search and rescues on the open sea, she wants to go deeper into a medical specialty.
“I’m healing beautifully. This was an amazing process and I’m glad I could see it firsthand,” she said.
Naomi Klouda can be reached at [email protected]
Correction: MACI is no longer referenced by its acronym, matrix induced autologous chondrocyte implantation. In Europe, Vericel was not allowed to obtain a trademark on a product that referred to a method of treatment.

Centuries of tides changed the Karluk River’s course and the Tribe that continues to claim ownership today.
Storms in Shelikof Strait altered the beach where the ancient Alutiiq people settled thousands of years ago on Kodiak Island. It sent up big boulders, not just sand and pebbles. Slate blue waters covered the homes of those people and when that wasn’t enough, swallowed the artifacts so that only divers can regain its past for future people. It made more modern generations move.
First they lived on one side of the river. Then they moved to the other side of the river. Pushed inland, Karluk Alutiiq villagers, the 49 people left today, live a hard walk from the beach where precious salmon enter.
Karluk Chief Alicia Reft was in elementary school when the trouble started. Her parents and grandparents said their river lands, and ultimately that means the Karluk, were “illegally taken” in 1980.
That was when the small Tribal corporation created under the Alaska Native Land Claims Settlement Act agreed to merge with another new entity, Koniag Inc., the regional corporation formed after the passage of ANCSA in 1971.
The agreement included the 24-mile Karluk River lands.
“That was when they signed to merge with the Koniag Native Regional Corp.,” Reft said. “People were naive back then. They believed what they were told by the regional corporation, that this would good.”
Under faulted advice from a Tribal leader, Reft said, Karluk gave up its independent tribal village corporation option to merge with Koniag. The agreement absorbed the mighty Karluk and Sturgeon River and village lands of nearly 84,000 acres.
Koniag claimed title to the lands except where the people’s houses and the school sat on a 34,000-acre reservation that was created in 1939 by the Bureau of Indian Affairs.
What Alicia Reft’s parents were told along with five other tribes — Larsen Bay, Old Harbor, Ahkiok-Kaguiak, Ouzinkie and Afognak — made sense at the time. If they joined their resources together of timber, fisheries and lands, their larger joint holdings would eventually pay bigger dividends.
But it didn’t take long for the villages to do their math. Afognak’s Ole Olsen calculated the timber value alone in his village Afognak Island holdings and decided the $2,100-per person settlement money offered was an insulting joke.
In 1984, Olsen’s lawsuit against Afognak, Victor Peterson for Old Harbor and Ralph Eluska on behalf of Ahkiok, were joined as a combined lawsuit in Alaska Superior Court. Judge Douglas Sedahely found that Koniag hadn’t represented the truth in its case to gain the mergers.
The end result was a sweep back to allow each of those three entities to break away and form their own village corporations. Koniag was forced to pay each village $600,000 in cash plus return the lands.
“Karluk didn’t join the lawsuit in court. People back then were trying to survive. They didn’t have the money for attorneys,” Reft said. “But the people knew the merger was wrong.”
“No one except possibly Ole (Olsen) saw the future,” said Frank Peterson, an original director in Ahkiok-Kaguyak Inc. “He was the only one to foresee the timber assets.”
Peterson said foreseeing the loss wasn’t easy for any of the villages’ leaders.
“I went to Old Harbor and had to strong-arm my brother (Victor) to get him to join the lawsuit. I made at least three trips to Karluk and Larsen Bay to try to convince them,” Peterson said.
But Larsen Bay’s Jack Wick and Karluk’s Allen Panimariof were each on the Koniag board of directors, and Wick served for a time as a Koniag CEO. They convinced the people that the merger was the right course of action, Reft said.
It didn’t take long for the Karluk people to realize the severe loss as their own village economy spiraled downward in the 1990s and 2000s. The village shrank by half when people moved out to find jobs, Reft said. The other villages that went off on their own had begun to prosper and earn dividends on their corporate investments.
A young Reft, barely into her 20s, and her Tribal council began to ask questions.
They asked: Even though Karluk didn’t hire an attorney to join that lawsuit, didn’t the ruling still apply?
For 35 years now, that question hasn’t been answered to the Karluk Tribe’s satisfaction, but Koniag believes the courts have been clear.
The regional corporation contends that the village of Karluk does not have claim to sole ownership of the lands around the river, even if they say it was wrongly purchased from them for a very low price.
“There is a clear difference of opinion and we understand and respect the Karluk Tribal Council’s opinion,” Koniag Regional and Legislative Affairs Executive Tom Panamaroff wrote in response to questions from the Journal. “However, the courts have consistently said that Koniag owns the lands. It was part of a merger that happened more than three-and-a-half decades ago. It is clear the land belongs to all Koniag Shareholders, including those residing in Karluk.”
What does a salmon river cost?
Koniag absorbed 83,767 acres from Karluk, including the famed Karluk River lands. Koniag quickly found out how much a famous salmon river sells for: By selling a temporary conservation easement to the U.S. Fish and Wildlife Service, Koniag gained more than $29 million.
What did each Karluk shareholder get in exchange? Exactly $2,100 per person to its original 186 people in 1984, or $390,600, and 1,800 acres was conveyed to the Tribe. But even this was trickery, the descendants say. They were paid with their own settlement money.
“It was our money that was given back to us; so they didn’t pay us anything,” Reft said.
The funds Koniag paid to Karluk came from the original Karluk village corporation settlement set aside by Congress under ANCSA, which included nearly $1 billion in payments as part of the settlement along with 44 million acres of land.
Karluk elders noticed they had been cheated and their Tribal council led the charge through the years.
They kept pointing to the 1984 Sedahely decision that ruled the 1980 village corporations’ merger with Koniag had constituted fraud. When Koniag didn’t listen, they took it to federal officials such as the Bureau of Indian Affairs and the Bureau of Land Management.
When those agencies decided they had no jurisdiction to help, the Tribal chief and her council members went to the congressional delegation. They’ve turned to several unhelpful generations of Interior Department secretaries, back to their congressional delegation, then to any official, even candidates running for office, who will listen.
“We’ve been fighting this thing all these years,” Reft said. “Now there’s hardly anyone left that was involved in the original (1980) merger.”
They’ve also been told there is no statute of limitations on contesting the merger.
“So we keep fighting this, year after year,” she said.
A stack of court filings eight inches thick proves her point.
Panamaroff said the position of the regional corporation is that all Koniag shareholders, including shareholders residing in Karluk, are owners of the Karluk River lands, “and Koniag makes every decision with the best interests of ALL our shareholders in mind.”
“We have great respect and admiration for the Karluk Tribal Council and community residents. We wish them success and are glad they are part of the Koniag family as shareholders. As a corporation we are legally, ethically and morally bound to create economic growth to provide opportunities and benefits for our shareholders, which includes shareholders residing in Karluk.”
The coveted Karluk
Russian fur traders set up a post at Karluk in 1786, just 10 years after the American Revolution. They came for the otters. Pelts went for $3,000 each at the market peak.
Soon, the Russians also were setting up saltries and feeding themselves on the rich salmon entering the Karluk. But the Russians lost interest in Karluk when they depleted the otter population there, and so they moved on, according to local history.
The otter populations didn’t survive the Russian period, but the salmon runs weren’t too badly dented. By the time American ownership called the shots, wealthy cannery owners from Puget Sound had discovered the Karluk River’s bounty.
Just 11 years after the ink dried on America’s purchase of Alaska from Russia, the first cannery on Kodiak was set up at the banks of the river in 1878. Four years later, five canneries were operating there.
Karluk’s population of Alutiiq people was dwarfed as the American, Chinese and Filipino cannery workers arrived. For several decades they processed the salmon that the fishing fleet took out in the “millions each year,” according to the Alaska Packers Association’s historical accounts.
Watching how outsiders invaded and depleted the salmon that had long been their primary source of food and a store of wealth for trading with mainland Alaska Native tribes, the Karluk Tribe sought a solution. Chief Ewan Naumoff, active in the late 1920s and ‘30s, found a method for protection by seeking reservation status. The Tribe’s members voted 59-0 to pursue becoming a reservation.
That status was granted in 1939 and it set up an unusual situation of ownership favorable to the Karluk Tribe. The National Indian Law Library recorded Karluk’s Reservation Constitution in 1939.
“They sought the creation of the reservation in order to protect their river from over-fishing,” said Karluk Tribal board member Joyce Jones. “They saw what the canneries had done, an awful devastation.”
Jones remembers the stories.
“The people filed a lawsuit against the fishing companies for taking too many fish,” she said. “The canneries and their buildings covered the whole spit for a lot of years and the people knew they had to do something.”
The move worked.
The Karluk Tribe was given ownership of its river. Under reservation law, the Karluk River was closed to commercial fishing by anyone but Tribal members. Federal reservation law outlined specifics on who may fish: “The waters of the Karluk Indian Reservation shall be open to commercial fishing by bona fide native inhabitants of the native village of Karluk and vicinity, and to other persons insofar as the fishing activities of the latter do not restrict or interfere with fishing by such natives. Such natives shall not be required to obtain a license to engage in commercial fishing in the waters of the Karluk Indian Reservation.”
It further spelled out the Tribe’s ownership of the Karluk River containing approximately 35,200 acres.
Karluk was under federal law protections decades before ANCSA began to apply, due to this unique reservation status, one of only two villages in Alaska to obtain it. Metlakatla on Annette Island was the other. The lands were deeded to Karluk Tribe and control over the rivers, according to the Cornell Law Institute, which archives the historical records.
The law was put to the test in at least one case, in the 1940s, while Alaska was still a territory. In Hynes vs. Grimes Packing Co., the regional U.S. Fish and Wildlife Service was able to sue Grimes Packing Co., for illegally fishing on Karluk Reservation river waters.
The agency seized the boats and net gear owned by the cannery. Grimes appealed the case to the Ninth Circuit Court of Appeals, which ruled on Nov. 10, 1950, to uphold the the seizures for illegal fishing.
ANCSA changed the law
By the time the Karluk Tribe was asked to do the merger with Koniag, they were warned that the reservation status was to become null and void, replaced by the new body of law under ANCSA. That was the first step to losing their river.
The Karluk Tribal Council, composed now of Chief Alica Reft and other Tribal members, has taken a stand. They were joined by other members of the Tribe in a unanimous move.
Since their lands were illegally taken in the merger, they contend, they are asking for a return to the reservation status. To do that, they’ve hired Tribal Attorney Kurt Kanam, who has made filings in federal court asking for a return of those lands.
But Koniag allegedly owns even the reservation lands where the residents live, even the Tribal building that doubles as their post office and utility office. This excludes only land where the school sits.
“If it is all owned by Koniag though, where is their deed of trust saying they own the land?” Chief Reft asks now. “If they really own the land we live on, our reservation lands, where’s the paper that proves a transfer of ownership?”
The deed doesn’t seem to exist, she said. Koniag has never produced it, but Panamaroff wrote that the ownership issue is settled from a legal standpoint.
“Over the years, the courts have consistently ruled that Koniag owns the land and that the merger with Karluk Native Corporation is valid,” Panamaroff wrote to the Journal. “The Karluk Tribal Council has made several legal claims in various forums over the years contending that the 1980 merger was invalid. Koniag believes the time has long since passed for the Karluk Tribal Council (or anyone else) to legally challenge the merger between Karluk Native Corporation and Koniag. We would like to move forward and find ways to work together.
“We can work on together to create benefits for all of Koniag’s Shareholders, including those residing in Karluk. While we have compassion and respect for the Karluk Trial Council and Karluk residents, we are moving forward.”
New ownership test
A new ownership test emerged recently, however. Chief Reft and her husband, on behalf of the Karluk Tribal Council IRA, had built a cabin near the Karluk River. It is land included in what Karluk claims as its own, now mapped by Koniag as inclusive of regional corporation lands.
The cabin is for cultural activities to be used by for educating youth and other gatherings as well as for a source of tribal income.
Though Koniag knew of the cabin for several years, Koniag filed a lawsuit against Alicia Reft and her husband, Dean Andrew, more recently. The regional corporation alleged “trespass” and used the term “eviction” in the lawsuit.
On July 28, 2012, Koniag’s vice president of corporate affairs, Charlie Powers, wrote to Alicia Reft that the “cabin on Conveyance 105 is on Koniag land.” He wanted to meet on Sept. 1, 2012, with “the cabin owners to formulate a plan with owners of cabin and plan for its removal.”
No deed of ownership was produced to prove Koniag, and not Karluk, owned Conveyance 105. Instead Powers produced a document that showed approval of a planned merger, Dec. 10, 1980.
Chief Reft countered with signatures of Tribal members who wanted out of that merger. The document stated “voting members of the Native Village of Karluk Tribal Council unanimously agree to de merge from Koniag Inc.”
The document lists the successful court cases that challenged the merger with Koniag — or got out of mergers and won — which Karluk maintains it could it not join due to lack of funds to fight at the time. It named the original victors: Afognak, Arnold Olsen (1980) Nicholas Shuravloff, (1981) Ralph Eluska, Akiok, (1982) Victor Peterson, Old Harbor (1982).
“Karluk was never compensated like these other Tribes. On Jan. 6, 1984, the cases were handled collectively,” stated Karluk’s response to Koniag’s Charlie Powers.
Wins and losses
Alaska U.S. District Judge Sharon Gleason dismissed Koniag’s lawsuit against Alicia Reft and Dean Andrew in September 2014.
Was this a victory? A step closer to regaining the lost lands and the river?
“Not necessarily,” answers Karluk’s Attorney David Clark. “It’s the first step in 13 steps to be made. At least (Judge Gleason) agreed the case doesn’t belong in federal court.”
State court is where Clark would rather argue the “trespass” case. But the ball is in Koniag’s court to decide whether they want to pursue a dismissed case or not, he added. Once the land ownership questions are opened, Karluk may finally get its first chance to argue in court.
“They’ve never had that day in court to say this is their lands or that the merger was fraud,” Clark said.
He has argued in filings over the past years that “Koniag wants to sweep under the carpet its theft of Karluk Native Corp. lands in this federal court lawsuit. Koniag received 83,767 acres of valuable land from Karluk, and has received or will receive millions of dollars from the Fish and Wildlife Service by defrauding Karluk shareholders out of their ANCSA heritage.”
Clark argues that Koniag undervalued the lands owned by Karluk to its shareholders long ago, “while cynically engaging in efforts to sell the resources for considerably more. The merger of Karluk into Koniag is one of the largest land thefts induced by fraud in the State of Alaska.”
And that is where the case languishes, as an eviction-trespass issue. Bounced from state court, federal court and Tribal court, the Karluk Tribe keeps fighting to recover its river.
Naomi Klouda can be reached at [email protected]